Small Business

A Raw-Milk Raid Leads to a Special Thanksgiving


After a Kentucky raw-milk farmer gets busted in Ohio, his shareholders decide to help run the farm and its distribution business

On Thanksgiving, Kimberly Gelhaus, a 39-year-old mom and student at the University of Cincinnati, will drive over an hour to the Double O Farms in Verona, Ky. Once at the tiny farm, she, her husband, and three children (ages 6, 8, and 18) will spend several hours dispensing milk from a holding tank into dozens of glass bottles, and then affixing lids.

Once the work is done, "We'll just sit and talk," she says.

The story of how Gelhaus and her family came to spend this holiday working and frolicking on a farm isn't about charity, but rather about how a seemingly straightforward business investment turned into a legal crisis—and then evolved into something much bigger, something involving community and caring. Because the legal part wasn't resolved until earlier this month, Gelhaus and others involved in the story didn't want to talk about it until now.

It all began in October, 2004, when Gelhaus went on a health kick. She had spent much of the previous two winters in doctors' offices and emergency rooms with sick kids. "The doctors knew us so well, we were on their Christmas card list," she recalls. A major part of the new regimen included raw milk, which is unpasteurized and unhomogenized, and viewed by increasing numbers of consumers and health experts as healthier than the pasteurized stuff because its enzymes and beneficial bacteria haven't been destroyed by the heat of pasteurization.

Personal Consumption

Because the sale of raw milk is illegal in Ohio and Kentucky (and 23 other states), she joined a herd-share program she had heard about which had just been launched by Gary and Dawn Oaks, owners of the Double O Farms. She joined about 160 other families as shareholders, investing $225 for three shares, which gave her partial ownership of the farm's 15 cows. She also agreed to a maintenance fee of $80 a month. Her shares entitled her to three gallons of milk each week, which Gary delivered to various drop-off points in the Cincinnati area as a convenience to the shareholders.

The idea was that they wouldn't be purchasing milk, but instead obtaining it directly from cows they owned—because even in the states that prohibit raw milk sales, farmers are allowed to consume their cows' milk (see BusinessWeek.com, 10/19/06, "States Target Raw-Milk Farmers").

For Gary, 43 and Dawn, 39, who had chucked conventional careers in inventory management (for him) and health care (for her), the shareholder arrangement served two purposes. It allowed them to fulfill their personal desire to make milk available to consumers in what they believed was a healthier form, and it enabled them to escape the mass-production-commodity cycle that had seen an estimated 1,500 Kentucky dairies bite the dust in the decade between 1993 and 2003 alone, says Gary.

Dairy Raid

For nearly a year-and-a-half, everything went as planned. The milk arrived on schedule and the health of Gelhaus' children improved dramatically. But on Mar. 6 of this year, everything changed. At about 1:15 in the afternoon, Gary Oaks arrived at a Cincinnati parking lot for what he thought would be a routine delivery, distributing milk to his shareholders. He got out of his truck, opened the trailer, and began handing out bottles of milk to a few of the dozen or so shareholders present.

Gelhaus wasn't there, but another shareholder who was, Joanne Miller, of Morrow, Ohio, remembers vividly what happened next. "I was placing empty bottles in carriers when I noticed a Cincinnati police cruiser moving through the parking lot slowly toward the trailer. Another cruiser followed. Officers moved toward the cow-share owners and told them not to pick up the milk that had already been set out, and actually moved in to prevent members from picking up the milk."

Out of several unmarked cars emerged men in plain clothes who "gathered near the tailgate of the trailer," Miller says. Only one would identify himself, an agent of the Ohio Dept. of Agriculture (ODA), she says. Other agents were there from the Kentucky Public Health Dept. and the U.S. Food & Drug Administration. Joanne Miller thinks there were about eight agents there, plus the four Cincinnati police. As the agents began confiscating the milk both from the truck and from a few shareholders, and loading it into an ODA van, she says, they told objecting shareholders, "What's happening here is not your concern."

"All Kinds of Laws"

This upset the shareholders, who began shouting that the milk belonged to them, that the agents had no right to it. One of the shareholders stood on the trailer's tailgate and waved her shareholder documents at the agents, who ignored her.

Sensing the situation might be getting out of hand, the Cincinnati cops called for reinforcements, and two additional cruisers arrived. In the meantime, several plainclothes agents moved to separate Gary Oaks from his shareholders. For the soft-spoken 43-year-old, who grew up on a Mississippi farm and had only once in his life even been stopped for speeding, it was all becoming a terrifying blur. They moved him toward one of the unmarked cars and ordered him in. "They asked me what I was doing. One said, 'You're in a lot of trouble. You've broken all kinds of laws.'"

Oaks didn't know what to say. "I was ignorant. I didn't know it was illegal to drink milk. I hate to sound ignorant."

Then they moved him from that car into a second car, and the routine started over again, except more intensively. One agent was shouting from the back, and another in the front was demanding that he write something that sounded to him like a confession that he was selling unpasteurized milk. He began feeling ill. "They were telling me what to write, that I wouldn't sell milk." He believes he started to write something, but can't remember what.

"We Are 911"

The ODA produces a "Witness Statement" with block printing, signed by Oaks and an ODA investigator: "We run a cow share business in KY. Sell shares of cows to people for $75 a share.…" It includes a few more details about the maintenance fee and delivery schedule and concludes, "Whole milk is not pasteurized."

When Oaks emerged from the car, several shareholders said he looked terrible and asked the officers to call 911. "We are 911," one of the officers stated. A shareholder decided to call 911 on her cell phone, seeking an ambulance. The agents moved Gary into a third car. He told them he was feeling awful, got out of the car, and slumped to the ground. An ambulance arrived and took him to a hospital. His blood pressure had soared to more than 200-over-156. "They were shocked I wasn't dead," Oaks recalls. He was released later that day, apparently without having suffered a heart attack.

An ODA spokesperson says, "Our officials questioned Mr. Oaks, so did federal officials. They were trying to learn about what he was doing, what the substance was, and why it was being brought into Ohio." Officials from the Kentucky Public Health Dept. didn't respond to questions.

Volunteers for Milking

Oaks continued to feel ill over the next few days. He had nightmares of "police and agents coming out from behind bushes and buildings." He couldn't milk the cows. A few days later, the feelings worsened. "I was choking, I couldn't get my breath." His wife took him back to the hospital, and this time he was admitted for several days.

The one piece of good news was that his shareholders had sprung into action. More than 100 met within days at a local church and tried to figure out how they could help the farm and the Oaks family. The most immediate issue was the cows these shareholders owned—they needed to be milked twice a day, and most of the city-folk shareholders knew little about cows beyond the fact that their milk arrived in bottles every week.

Fortunately, three shareholders who lived close to the Double O Farms had also been farmers, and at one of several meetings the shareholders held, these individuals volunteered to do the milking. The next pressing issue was how to get the milk bottled and out to the shareholders, since Gary couldn't deliver.

Stack of Bills

This is where Gelhaus dove in. "I took over coordinating car pooling…We had to coordinate deliveries for 160 families." Several dozen shareholders became involved in shuttling milk from the farm to shareholders in Kentucky and Ohio, some driving several hours each way. Others handled bottling, and still more volunteered to gather hay and do yard work around the farm, or bring food to Dawn and her three children, all under age 10.

As the winter wore on, Gary would be hospitalized twice more. Dawn says doctors concluded he was suffering from post-traumatic stress syndrome, a stress disorder most common among soldiers in battle. A couple of shareholders with psychology backgrounds provided counseling.

Adding to the family's stress was that they didn't have health insurance. By the end of spring, Gary's medical bills were approaching $50,000. And then there was the matter of his legal problems—stemming from Kentucky, Ohio, and the federal government. As things turned out, Kentucky officials backed off from filing formal charges, after an informal hearing by the Kentucky Milk Safety Board. But Ohio eventually filed charges accusing Gary of illegally selling raw milk and an unlabeled product. His legal bills were soaring past $10,000.

Designated Drivers

By the summer, life finally began improving. Gary was feeling well enough to work on the farm. He was able to negotiate a reduction in his medical bills with the hospitals. Shareholders passed the hat to take care of his legal bills. Two shareholders even agreed to loan him funds to move the farm to a badly needed larger tract of land a half hour from his existing farm.

The family decided not fight a protracted legal battle to avoid incurring additional legal expenses and stress. On November 2, Gary went to a county municipal court in Reynoldsburg, Ohio, and pleaded no contest to violating the state's dairy licensing and labeling laws. He was fined $415, along with an additional $85 in court costs. The FDA also sent him a warning letter against interstate sales of raw milk, which leaves open the possibility of legal action.

Shareholders have scaled back their involvement in the farm's activities as Gary has recovered his health. But the need for car poolers like Gelhaus remains, in order to get milk delivered to shareholders, since Gary doesn't want to challenge the FDA's prohibition about crossing state lines to make deliveries in Ohio.

Show of Appreciation

On Thursday, many shareholders will be giving thanks for Gary—and Gary for them. "This crisis brought us more strongly together," says Mary Lynn Laufer, a Cincinnati shareholder. "We've become a unique, tightly knit group."

Adds Gelhaus, "The crisis showed us just how connected we are. The hardships pointed out to us that we need the farmer and the farmer needs us." Gelhaus is traveling to the farm on Thursday not because her work is required, but as a personal gesture of appreciation for Gary and Dawn, to allow them to take the day off.

For updates on this situation, and additional thoughts based on having investigated a half-dozen raw milk enforcement actions over the last few months in California, Michigan, Ohio, and Kentucky, see my blog, www.thecompletepatient.com.


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