Small Business

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

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. The news wound up prominently featured in two local papers, prompting questions from neighbors and friends, since Beech Hill Farms had never before been in trouble with agriculture authorities.

"It was embarrassing and humiliating," says Sharts.

There was also the tangible penalty of a $300 fine, and the threat of a much larger fine for a second offense—at least $600, and possibly many times that (based on $600 per gallon or half gallon of contaminated product)—significant financial risk for an operation "that is barely break-even."

Adding insult to injury, Beech Hill Farms wound up on Minnesota law firm's blog, which advised: "If you are diagnosed with a Listeria infection (listeriosis), you should contact a lawyer at Pritzker Ruohonen immediately by calling toll-free…If you retain us, we will help you get the tests you need to link your listeriosis to Beech Hill Farms milk."

Testing the Inspection Process

Compounding Sharts' distress, the state refused in mid-April, when her farm's raw milk passed all state tests and was deemed safe to sell again to consumers, to post a new press release on its site announcing the change. Instead, the old release remains on the state's site indefinitely. "It's important for [the release] to stay on our site," says a spokesperson for the department. "What if someone has the [contaminated] milk in their freezer?"

What bothers Sharts more than anything else about the entire affair, though, is what she believes are questionable test readings by the state's laboratory, as well as careless testing methods by inspectors—that make her seriously doubt whether the milk was ever infected by the listeria bacterium.

She has demanded a meeting with Agriculture & Markets Dept. Commissioner Patrick Hooker, on behalf of herself and three other farmers whose raw milk has been identified over the last eight months as carrying pathogens. Given the severity of the assault on her farm's reputation, and the state's hard line in continuing to publicize her alleged transgression, Sharts would like to convince Hooker to reopen her case.

Her concerns include careless inspection procedures, which Sharts says include inspectors unnecessarily opening her bulk tank (exposing the milk to contamination) and failing to properly clean their boots and hands. When the inspectors came Apr. 13 to re-inspect her dairy, she decided to secretly video them from a camera in the milk house installed for security purposes. In one segment, an inspector can be seen opening the bulk tank and looking in, and in a second segment, an inspector is shown rolling up her pants after having been in the barnyard with chickens and other animals, thus possibly contaminating her hands, says Sharts.

The state spokesperson says the inspectors "follow standard Food & Drug Administration protocol for sampling and testing milk." That includes being allowed visually to inspect milk by lifting the tops of bulk tanks. But protocol may not include rolling up pants legs after coming into the milk house since, according to the spokesperson, "Gloves are not routinely worn when taking samples, instead hands are thoroughly washed."

Sharts also produces printouts showing wide discrepancies in test results on routine nonpathogen bacteria measurements between the state's lab and the lab of the company that purchases her farm's milk for pasteurization. She argues these discrepancies are the result of the state lab using outmoded manual measurement techniques, as opposed to the electronic measurement performed by her purchaser. The state says its manual measurement techniques are still acceptable.

Perhaps most tellingly, says Sharts, none of the individuals who consumed her supposedly contaminated milk became ill. Indeed, no one has become ill from any of the three other cases of contaminated raw milk discovered by the state since last December, the state spokesperson says—since results typically aren't publicized for at least a week after samples are taken, it can be assumed that at least some of the milk sold has been consumed.

Raw Milk Dairies Face "Scare Tactics"

According to Peter Kennedy, a lawyer who monitors legal issues of raw milk dairies for the Weston A. Price Foundation, an organization that encourages raw milk consumption for its health benefits, New York's accusations against Sharts and other farmers over the last eight months represent "scare tactics" and coincide with a renewed FDA campaign against raw milk, launched Mar. 1 in the form of a press release.

Sharts was so disgusted by what happened that she returned her raw milk permit to the state in late April because "I didn't want to play Russian roulette with the food lab" and risk another listeria finding with a potentially much heftier fine.

But now she's reconsidering. It turns out demand for raw milk is so strong, and perhaps faith in the government's testing procedures so weak, that she has received half a dozen inquiries in just the last few weeks from consumers who saw the press release about listeria in her milk on the New York agriculture department site. "I'm a fighter," she says.


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