The Investigative Farmer

An upstate New York dairy owner, fined and pilloried for selling tainted milk, is fighting the state's claims with lab tests and secret videos

by David E. Gumpert

When you run a small farm and raise dairy cows and other animals, the state agriculture inspectors can have a major impact on your business. They come around periodically to see if your milk house is clean and whether you've vaccinated your animals for certain diseases. Like big-city police and restaurant health inspectors, the agriculture inspectors vary in how strictly they enforce the laws and hand out penalties.

Dawn Sharts, owner of Beech Hill Farms, has seen lots of inspectors come and go in the 31 years she's been running her upstate New York dairy farm. She credits the absence of any trouble—before this year—to "the fact that I've learned to bite my tongue and smile when they make suggestions," like altering the tubing and piping on the milking system for her 20 cows.

Milking a Trend

But things changed when Sharts decided to take advantage of a state law that allows farmers with special permits to sell unpasteurized milk directly to consumers from the farm. The number of farms holding such permits has increased to 18 this year, from 10 in 2005, reflecting growing interest in raw milk for its perceived health benefits. (New York's Agriculture & Markets Dept. began issuing permits for the sale of raw milk in the early to mid-1980s; prior to that, authority had rested with county health departments.)

Sharts says last fall agriculture inspectors suddenly began "treating me like I was selling toxic waste." The situation has become so nasty that the inspectors shut part of Sharts' production down for several weeks and publicly accused her of selling a tainted product. She has fought back with vehement e-mail denials and weekly phone demands for a meeting with the head of New York's Agriculture & Markets Dept. And, in a few instances, Sharts has even produced videos to help prove her points.

For Sharts, 53, whose farm struggles to gross $100,000 annually, the possibility of an additional product that could generate significant additional cash was compelling. After filling out a bunch of forms and spending more than $1,000 to have her cows tested for bovine tuberculosis and other diseases, she passed inspections and received her permit in January, 2006.

"I was excited. This was going to be a new product line for us," Sharts says. She had been steadily receiving more requests for unpasteurized milk from consumers who would call, e-mail, and stop in at her farm in Greenwich, N.Y. Especially exciting to Sharts was the fact that she could collect $6 a gallon from customers coming to the farm to buy raw milk, versus the $2 or so she receives from local processors who pasteurize her milk for sale in grocery stores.

She also liked the idea that the state would be testing her milk regularly, providing reassurance to customers that her product was as pure as she felt it to be. Within weeks of receiving her permit, she had a dozen customers regularly visiting the farm to purchase raw milk.

A Routine Test Leads to Disaster

Little did Sharts know that having legal authority to sell raw milk, which has triggered controversy in Michigan, Ohio, Kentucky, and other states (see BusinessWeek.com, 4/26/07, "Back in Biz, Thanks to Vocal Customers" ), would turn into a regulatory and publicity nightmare. It began when a routine test by state agriculture inspectors on Mar. 26 showed that her milk was contaminated with a dangerous bacterium, listeria monocytogenes, that occasionally infects dairy products and more commonly infects deli meats.

First, the state ordered her to stop her raw milk sales. Then she had to phone the three customers who had purchased that batch of milk, tell them it was contaminated, and advise them to discard it.

Next, the state issued a press release, which it posted on its Web site and distributed to local media, stating that Beech Hill's raw milk was contaminated.