Danone will give Northeast organic dairy farmers financial help, more time on contracts
File / Maine Dairy Promotion Board
Danone North America will give organic dairy farms in Maine and elsewhere more time on expiring contracts.
Danone North America, which had decided to end contracts with Northeast organic dairy farmers in August 2022, will extend those agreements for another six months, while also providing financial support and consulting services to the farms.
In August, Danone notified 89 dairy farms, including 14 in Maine, that their contracts would end next year as the company pulls out of the northeastern U.S. market. That would leave many farms no outlet for their milk.
In recent years, France’s Danone S.A., the owner of Danone North America and its Horizon Organic brand, has transitioned milk procurement to large farms in the West and Midwest.
Under the new plan, the end date of the Northeast milk contracts now will be Feb. 28, 2023.
Danone North America said it also will provide the farms an additional "transition payment" on milk purchases from during the last six months of the agreement.
The company will also make those payments to Northeast farmers who have already left its network after receiving the non-renewal notice, based on the last six months of their contracts.
Danone declined to disclose the total value of the financial support.
“Since the original decision, we’re talked to anyone, layers of folks, from farmers to the Maine Department of Agriculture to Rep. Pingree to the federal level. Through those conversations, which were very productive conversations, we listened and learned,” Chris Adamo, vice president of government relations, policy and partnerships for Danone North America, told Mainebiz.
Danone North America, which is a certified B Corporation, also said it would provide the producers with free access to financial consultants that specialize in supporting the agriculture community.
“For us, it’s been a reflective process. We feel this help reflects the values of the company,” Adamo said.
Danone also said it would work with regional stakeholders, including state and federal governments, to explore co-investment solutions for challenges related to the Northeast's organic dairy infrastructure.For example, the company is exploring the possibility of a co-op to address the hauling and transportation problems in the Northeast. There might also be low- to zero-interest loans, with state and federal partnership, the company said.
“This will take time. It will depend on stakeholders on the state and federal levels and other companies,” Adamo said. “We’re probably not going to solve every problem. But we want organic dairy to be viable in the region.”
The initial decision to end contracts in the region stemmed largely from transportation issues, including the distance the milk has to travel to the processing facility in New York and the difficulty finding drivers.
“There’s a cost to 600-plus miles in total hauling trips,” Adamo said. “It’s not an easy job. There’s multiple farm stops, it requires an overnight stay, it’s difficult finding drivers.”
Finding solutions to the transportation issues will take several months and require local, state and federal support, according to Adamo.
“Overall, we’ve had very positive responses from all so far,” he said.
Most Recent
Most Recent
0 Comments