Governor Janet Mills today urged the U.S. Department of Agriculture to provide support to the Maine organic dairy farms who were notified recently that their contracts will not be renewed by the global company Danone’s subsidiary, Horizon Organics. In a letter to U.S. Agriculture Secretary Tom Vilsack, Governor Mills noted the serious impact that the termination of the contracts will have on Maine’s organic dairy farmers, the dairy industry statewide, and Maine’s economy, and said that, in addition to state and regional efforts, Federal leadership is necessary to help mitigate the impact on Maine’s dairy industry.
“Dairy farms are at the heart of Maine’s agricultural industry, providing numerous benefits to our rural communities and to our economy. Danone’s intent to discontinue Horizon contracts poses a significant threat, not only to 14 dairy farms in Maine and 89 across the Northeast which will be directly impacted by this decision, but to family businesses, supply chains and the overall dairy community in our region,” wrote Governor Mills.
“My administration will continue to do everything that we can at the state and regional level to mitigate these challenges. But support and leadership are also needed at the national level,” Governor Mills added.
In her letter to Secretary Vilsack, Governor Mills requested a three month grace period for repayment of USDA loans and targeted federal financial relief for impacted farms as they transition to new opportunities. Governor Mills also reiterated her calls for the USDA to finalize its proposed Origin of Livestock rule, which would help maintain important markets for Maine organic dairy farmers, and to adequately enforce the rule. Organic dairy farmers in the Northeast have long been at a disadvantage because certifiers in other regions are not enforcing the rule as intended. Governor Mills also urged USDA to address the labor shortage in milk hauling and requested that the agency support both state and regional responses to the problem.
The Governor also noted in her letter that her Administration has requested Danone undertake the following actions: 1) make a substantial monetary donation to the Northeast Dairy Innovation Center to support farm transition, business planning, and investment; 2) make a substantial monetary donation to the company in Maine that plans to stand up in-state organic dairy processing; and 3) commit to paying our producers their premium payments in this final year contract and for their most recent contracts where premiums may not have not been paid.
Upon being notified by Danone about Horizon’s intent not to renew contracts with 89 organic dairy farms in the Northeast, including 14 in Maine, the Mills’ Administration immediately pledged its support for impacted farms and organized a meeting with Maine’s congressional offices and statewide agricultural service providers to discuss how Maine can best support farms that are slated to lose their contracts. The meeting resulted in a multi-organizational working group to create a tailored response to this challenging situation that meets the individual needs of each farm.
The Governor’s letter to Secretary Vilsack reads as follows:
September 15, 2021
Secretary Thomas Vilsack
U.S. Department of Agriculture
1400 Independence Ave., S.W.
Washington, DC 20250
Dear Secretary Vilsack,
Recently, the Maine Department of Agriculture, Conservation and Forestry (DACF) was notified by Danone North America, owner of Horizon Organic, of its intention to discontinue all contracts with its Maine dairy producers by August 2022.
Dairy farms are at the heart of Maine’s agricultural industry, providing numerous benefits to our rural communities and to our economy. Danone’s intent to discontinue Horizon contracts poses a significant threat, not only to 14 dairy farms in Maine and 89 across the Northeast which will be directly impacted by this decision, but to family businesses, supply chains and the overall dairy community in our region.
I understand that you recently held a meeting with the Northeast Agriculture Commissioners from states impacted by Danone’s decision, including Maine's Commissioner Amanda Beal, to discuss how the USDA can support both regional and state level responses moving forward. I appreciate your attention and leadership, and to that end, want to follow up with a letter outlining my administration’s response and recommendations moving forward.
Upon being notified by Danone about their intent, my administration immediately organized a meeting with Maine’s congressional offices and statewide agricultural service providers to discuss how we can best support our farms that are slated to lose their contracts. The meeting resulted in a multi-organizational working group to create a tailored response to this challenging situation that meets the individual needs of each farm.
We have been in contact with representatives from Danone and have requested that, beyond its one-year Horizon contract extension, the company undertake the following:
- Make a substantial monetary donation to the Northeast Dairy Innovation Center (NDIC) to support farm transition, business planning, and investment;
- Make a substantial monetary donation to the company in Maine that will be fundraising to stand up in-state organic dairy processing; and
- Commit to paying our producers their premium payments in this final year contract and for their most recent contracts where premiums may not have not been paid.
My administration will continue to do everything that we can at the state and regional level to mitigate these challenges. But support and leadership are also needed at the national level. We ask that the USDA move swiftly on the following:
- Consider a short-term grace period of three months on all USDA loans for impacted producers to help minimize the financial burden as these farms transition to other opportunities.
- Issue a final rule on Origin of Livestock and ensure that all certifiers are adequately enforcing the pasture rule and all aspects of organic certification for dairy. Organic dairy farmers in the Northeast have long been at a disadvantage because certifiers in other regions are not enforcing the origin of livestock rule as intended. We are hopeful that the final rule will be adopted as you noted on the call with the Northeast Commissioners, as this is a critical need.
- USDA should consider directing available COVID-19 relief and/or infrastructure funding towards financial support for impacted producers and related infrastructure. USDA has provided important support to the dairy sector as a whole during the pandemic; however, these additional steps would provide specific, well-tailored assistance:
- Infrastructure development grants that will support existing Northeast dairy farmers in accessing new markets (e.g., new processing facilities), and that will strengthen the ancillary businesses (e.g., feed mills) that are integral to the dairy sector.
- Expand funding for the NDIC for projects identified that will address this challenge and maximize the flexibility the Center has in using funds to address this issue.
- Make grants available for business planning assistance and farm succession planning for all impacted farms.
- Provide grants to support impacted farms in developing value-added processing, farm diversification, and/or new infrastructure needs.
- Waive any matching requirements for grants related to this issue.
- Support regional and state-specific responses. Individual state task forces are taking shape within impacted states, including Maine. We appreciate that USDA is aiming to support our states in identifying and implementing region-wide solutions that will support impacted farms and the long-term health of the organic dairy sector. Any regional infrastructure development should be coupled with support for market development strategies that will grow the market for Northeast organic dairy products. Alongside this effort, it is also critical that USDA consider funding opportunities for in-state processing, as this is not a one-solution situation.
- Explore opportunities for USDA to address the labor shortage in milk hauling. The nation-wide labor shortage is also impacting hauling of milk, creating additional challenges for the organic (and conventional) dairy sector in the Northeast. We are seeing state-level infrastructure projects creating competition for drivers.
Thank you for your attention to this urgent matter, and for your ongoing support and leadership in the agriculture sector. We greatly appreciate your proactive attention to the importance of this situation and are eager to continue working with you and your staff to identify ways to support our farmers during this challenging time.
Sincerely,
Janet T. Mills
Governor
cc: Commissioner Amanda Beal