Small Business

States Target Raw-Milk Farmers


For several months over this past summer and fall, Michigan authorities tracked Richard Hebron, 41, and his weekly truck hauls the 140 miles or so from Vandalia to Ann Arbor. To gather evidence, an undercover agent infiltrated an organization that was making private purchases from Hebron.

On the morning of Oct. 13, the authorities closed the loop on their complex sting operation. Just outside of Ann Arbor, a state police officer pulled over Hebron's truck during its weekly run, served Hebron with a search warrant, and with several other agents began removing goods from the truck.

Back home in Vandalia, a state trooper accompanied by four plain-clothes agents knocked on the door of Hebron's home, presented Hebron's wife, Annette, with a search warrant, and fanned through their small three-room house, removing their computer, business records, and product samples. Later that afternoon, in Ann Arbor, four additional agents, also armed with a search warrant, rummaged through a warehouse that was Hebron's destination when he was pulled over, seizing more business records.

Expanding Investigation The trigger in this huge investigation? No, it wasn't drugs, stolen goods, or terrorism. It was, of all things, raw milk and its various byproducts, including cream, buttermilk, yogurt, butter, and kefir. The Michigan Agriculture Dept., which oversaw the investigation together with the Michigan State Police, sees the situation as a simple matter of enforcing the law. Unfortunately, when it comes to raw milk, the law is no simple matter.

"We've had an investigation for several months now," says Katherine Fedder, director of the Michigan Agriculture Dept.'s food & dairy division. The investigation, she says, began with a report from a local public-health department last spring about children who had become sick who " had consumed unpasteurized milk." She noted, though, that the children's illness was never traced back to raw milk or any other specific food. In any event, a department inspector joined the co-op to purchase milk and expand the investigation.

"Our concern is that there's a violation of the Michigan law to distribute misbranded products and unpasteurized dairy products out of an MDA-licensed food establishment," Fedder says, adding that the investigation of the computers, records, and milk products confiscated will likely take "a few more weeks before we have a clarification." Then, Hebron and/or the co-op could be charged with "a whole variety of things" under a Michigan food law and a dairy law.

Crippled Co-op Hebron is a farmer with about 110 acres, where he raises beef, cattle, and chickens. He also manages the four-year-old Family Farms Co-op with two other farm families, through which all three farmers sell their products at the Ann Arbor outlet, as well as two outlets in Detroit and seven in Chicago.

One of those farm families, an Amish couple with eight children, owns the 70 milking cows that produce the cooperative's raw milk (milk that isn't pasteurized or homogenized). The Amish farmer doesn't have a phone or other modern conveniences and couldn't be reached. Hebron says the farmer has requested Hebron to speak both on the co-op's and the farmer's behalf and not to publicize his identity. This farmer is essentially out of business for the time being, and has had to throw out all his milk produced since Oct. 13.

The entire co-op is crippled, since the farmers are without their computer, fax, or business records. And already three Chicago retail outlets, unsettled by news of the Michigan officials' actions, have told Hebron not to bother returning with additional products. "This is what we do for a living," says Hebron. "We don't get unemployment checks."

The experience has left the Hebrons shaken. "They treated us pretty much like we were drug dealers," he says. Moreover, it's not clear if any of the co-op members will be charged with a crime and when the co-op may be able to resume its normal business.

Worse than Russia? The Family Farms Co-op thought it had dealt with the Michigan prohibition against retailing raw milk, which is similar to prohibitions in many other states, four years ago, when it set up the co-op. Under the arrangement, the co-op leases cows from the dairy farm and then sells shares in the herd to co-op members, each of whom pays $20 a year for their share. The co-op members purchase milk for $6.50 a gallon, which goes back to the dairy farmer in the form of a boarding fee for the cows.

"It has to be this way, because it's illegal to sell raw milk retail" in Michigan, says Hebron. Michigan law allows for people who own and board dairy cows to consume their milk, though.

After I listened to Hebron tell his story about the state police and agriculture inspectors refusing to let him make a call home after confiscating thousands of dollars worth of fresh farm products from his truck, and then serving a search warrant on his wife and rummaging through the farm family's home, I asked him, "Could you believe this was happening in the United States?"

"No," he said. "I have a customer in Chicago who says he's from Russia. He thinks this is worse than what happens in Russia."

Crackdown Factors This harsh Michigan action bears an eerie resemblance to the case of Organic Pastures Dairy, a producer of raw milk, which California agriculture officials shut down for more than two weeks (see BusinessWeek.com, 9/28/06, "Getting a Raw Deal?"). California authorities went after Organic Pastures when four children became sick from E.coli bacteria, but an exhaustive investigation turned up no evidence of E.coli at the dairy. In comparison, even though 200 people were sickened by E.coli from California spinach, none of the California spinach farms were shut down.

What's behind these crackdowns by major states against producers of raw milk? I suspect it's a combination of two forces at work.

First, there's the simple matter of growing demand from consumers seeking food with as little processing as possible, who want to buy it from local farm producers (see BusinessWeek.com, 10/16/06, "The Organic Myth"). Organic Pastures has seen its revenues climb 35% to 40% annually since it switched to selling raw milk in 2000. Similarly, the Family Farms Co-op has grown from nothing to nearly 1,000 members over the last four years.

Out of Proportion Second, as raw milk and organic milk (milk which is pasteurized, but obtained from cows fed organic feed, with no hormones) become more popular, large dairies are becoming concerned and exerting pressure on agriculture officials to crack down on the raw-milk producers. Just take a look at the Web site milkismilk.com to get a sense of the conventional dairies' concern.

Regardless of what anyone may think about raw milk, the heavy-handed enforcement action by Michigan authorities just feels inappropriate—way out of proportion to any possible violation of the law. It smacks of a speed-trap approach to law enforcement, except here the penalty isn't just a fine, it's the livelihood of three family farms.

(Note: I will be following the unfolding situation at Family Farms Co-op, much as I have the Organic Pastures situation, at my blog, thecompletepatient.com.)


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