We, the state of Montana, tried passing some legislation recently that would allow for farm sales of raw milk. However, it didn’t pass….many are hopeful that it will this next legislature, however if based on Idaho’s model, that is unlikely to pass – however hopeful many are. Why? Well that is what this blog is about…..we believe that its politics from 1989 that affects our right to purchase raw milk today and that Government intervention proved to be the catalyst of our ranking only 38th in the US dairy industry.
Government intervenes in our daily lives in so many ways, whether federal, state, or local levels. We affect this intervention by our desire to improve things, yet when has the Government really understood the long term affect of their intervention? Those that push for one legislation or another, have only good intentions, yet themselves do not consider the long term consequences’ of their own desires to improve their ‘lot in life’, or fix what they feel is broken.
So even though we usually don't talk politics, today we're on a roll.............~grin~
Pay-to-Play. That’s what our industry is considered now. In 1989, Montana chose to implement a supply management system made up of two parts, a ‘quota’ and ‘pooling’ system. There are various opinions on why…..some old-timers state that it was to be more ‘fair’ to the smaller dairy farms in the area…..others say it was to ensure that milk sales in Montana favored the Montana dairies. Regardless of the ‘intent’ of the quota and pooling system, it was enacted in 1990 after it was successfully voted into being by the 219 Montana dairies in 1989.
Because of its inception, milk sales in Montana are quite restrictive. Without going into all the ‘nuts & bolts’ of this system, the basics are this: in 1990 each dairy producer was given a set quota amount, based on 1989 production. All the milk is ‘pooled’ at the processing plants. It doesn’t matter how much milk dairies produce, it matters how many quotas they have and it varies depending on the ‘pooled’ milk. The quota system only affects the Category I, or Grade A fluid milk. You know, the drinking milk.
This system doesn’t guarantee the dairy will get Grade A prices for all his milk either. Confused yet? OK, we were too at first. Let’s see if we can simplify it. Pooling is based on the processing plants, what they produce, whether drinking milk, cottage cheese, etc. There are three processing plants in Montana, of which, one produces drinking milk, the other two produce drinking milk and more.
So, say a dairies quota is 10,000 pounds a day. Their milk is sent to the processing plants. At the end of the month, the Milk Control Bureau calculates how much milk was produced and compares it to what was processed (ie: drinking milk, cottage cheese, etc.) The highest price the dairy can get is only for the 10,000 pound quota, but it is also based on what was processed. So if only 75% of the ‘pooled’ milk was processed for drinking milk, the dairy will get 75% of its 10,000 pounds at the highest, Grade A price. Everything over that will be at the lower price, which is usually $1.50 less than the highest pooled price.
Needless to say, three things are certain, since 1990 Montana has seen a decline in dairies, from 219 down to 70 as of 2014. There have been NO new quotas added to the original 1990 quota levels. That is why our dairy industry is ranked 38th in the US.
Though some dairies today feel the ‘quota’ system benefits them, as in quota’s being considered an asset that can be borrowed against, Montana dairies do benefit from their milk being purchased first, prior to any milk being brought in from other states. Even with all their good intentions, we feel that this system has stymied our dairy industry.
Idaho farm sales vs Montana farm sales
In Idaho, you can get a permit to sell raw milk from your farm or set up a ‘farm herd share’. With either you are required to have a TB and Brucellosis testing prior to getting your permit. After that you get the Brucellosis testing annually and milk tests throughout the year, (milk samples taken for bacteria counts), if you have a ‘herd share’. If you have a permit to sell raw milk at your farm, you are required to have a TB and Brucellosis test annually and milk tests throughout the year.
Though the TB and Brucellosis testing is the responsibility of the farm or herd share, the milk testing is paid for by a small milk tax. Milk samples are picked up by the State Dairy Inspectors on their route to collect from the larger dairies.
So why can’t Montana copy Idaho? Let’s cover the difference between Montana and Idaho.
1. Quota & Pooling
Think about Montana’s milk management system we talked about above. Because they are so restrictive in nature, even as they may benefit dairies, the ‘quota’/’pooling’ system needs to be taken into consideration.
2. State Ranking
Montana is listed as 38th, in milk sales ranking. Idaho is listed as 3rd (based on 2011 totals) for cheese & milk production. Because Idaho is within the top five ranking of states for the dairy industry, it is reasonable to understand why a small milk tax is able to cover some of the costs for their Small Herd Exemption and Herd Share program.
3. State Covering Milk Testing
Idaho has 9 Dairy Inspectors covering their state. Now compare that to Montana, which has only three Milk & Egg Sanitarians (equivalent Dairy Inspectors) covering four regions in a state that is double the size in square miles when compared to Idaho. Hence the reason it is unlikely that our three state ‘inspectors’ can pick up milk samples from small raw milk sale farms & herd shares without a huge cost to the state of Montana. Remember our ranking compared to Idaho!
4. Why our Dairies will fight Small Herd Exemptions
As of 2014 there were 526 dairies in Idaho and 70 dairies in Montana. Of our dairies, just milk testing alone can cost a dairy $50-$1,500 quarterly. Now add that to the other testing requirements. The State Lab has two full-time and one part-time employee. Testing is done on a specific schedule……(ie: milk testing is done M-F, however, some testing is only done on one day a week). So consider the cost to Montana to add additional staff to cover the increase in work load? It was said that pooling tests would reduce the cost, yet with so few ‘inspectors’ and such a large area there is no way to ‘pool’ milk testing without hiring more staff in Montana.
5. Costs, who pays for it all?
When you actually compare Idaho and Montana, there is no comparison. All the costs associated with following Idaho’s raw milk laws would have to fall to the small herd exemption holders or herd share groups. Because the testing would require a licensed veterinarian, it would be expensive for a small farm, many would not be able to ‘sell’ enough milk to cover the costs if such raw milk legislation passed. Expecting the state of Montana to cover some of the costs isn’t reasonable either. So even though many would love to legally sell raw milk in Montana, (definitely we WOULD), the costs may not be realistic for many of the small farms. There is no way to see if the raw milk demand would be enough to justify the legislation.
Yes, taxes! Consider this….our Federal tax code is extensive and requires reporting of EVERYTHING…from winnings at your local casino, to transferring firearms, to income earned from a hobby, to…well you get the picture. Selling raw milk would be considered income and therefore reportable on your Income Tax Returns. ‘Herd Shares’ on the other hand could most likely be exempted because you aren’t ‘technically’ selling raw milk, somewhat like having a family cow, or GOAT. On the State side, consider how easy it would be for the state of Montana to locate all those Small Herd Exemption holders for a new tax. Just saying….Oh, let’s not forget the Livestock Reporting Form! Under Montana Law we have to report each: horse, mule, cattle, sheep, goats, emu, poultry, pig, etc. we own once a year and pay a tax. It even covers bees. Far too much Government intervention for our tastes, how about yours?
Having gone over all that, many still want the right to sell raw milk, at least give it away, or have ‘herd shares’. To us, ‘herd shares’ would probably be best suited for Montanans. With herd shares, you sell a percentage of your herd, they pay a monthly fee for you to ‘take care’ of their goats (herd share), and they would then get a percentage of the milk, cheese, and meat. THe monthly fee would cover feed, hay, and any other costs related to the herd. Technically, you wouldn’t be selling; you would be dividing it among the owners of the herd.
Do we want the raw milk laws changed in Montana? Of course we do!!!! If someone asks for milk from us, we have no choice but to turn them away or break the law. If someone buying a doe from us wants to sample mom’s milk first, well we are breaking the law by allowing them to have a sip of milk.
So if we aren’t using the milk, for whatever reason, we are now forced to throw it away. As a farmer, that is a wasteful way of doing business. As a self-styled, old-timer….we can’t stand the thought of throwing a useful commodity away. So what about cheese? Because of so many regulations, sadly, we can’t even sell our cheeses at the local Farmers Market. To sell at our local Farmers Market we have to ‘prove’ we have access to a Commercial Kitchen. Even if we did, we would still be prevented from selling our cheeses. Why? Because they are made with raw goats milk and under Montana Law that is illegal. Just think if the law was different. We could be supplementing our very limited income with herd shares or farm sales, yet with Government intervention (state and/or federal) we CAN’T.
So who is the real criminal here?