AS UPSTATE NY ORGANIC DAIRY FARMERS CONTINUE TO RECOVER FROM PANDEMIC, SCHUMER FIGHTS FOR ANSWERS ON TERMINATED DANONE CONTRACTS; WITH IMPACTED FARMS LEFT SEARCHING FOR ANSWERS, SENATOR CALLS ON DANONE FOR EXPLANATION AND AID FOR IMPACTED NEW YORK ORGANIC DAIRY FARMS
Danone North America Plans To Terminate Contracts With 89 Organic Dairy Farms In The Northeast –More Than Half In Upstate NY – In 2022; Terminations Could Force Some Farms To Close Forever, Senator Says
New York’s Organic Dairy Farmers Are Vital To Upstate Economy; After COVID Pandemic Hit Already Stretched-Thin Dairy Farmers Hard, Schumer Says Danone Terminations Threaten Dairy Farmers’ Livelihoods
Schumer: NY’s Organic Dairy Farms Need Answers
Following news that Horizon Organic, a subsidiary of multinational food conglomerate Danone, plans to terminate contracts in August of 2022 with organic dairy farmers across New York, U.S. Senate Majority Leader called on Danone to justify the contract terminations and ensure continued support for affected farms. Schumer said that the contract terminations are devastating to the impacted Upstate organic dairy farmers, some of whom switched to organic dairy production specifically to work with Horizon Organic.
“New York’s dairy farmers are the lifeblood of the Upstate economy and after years of being wrung dry by a system that disadvantages them, many are now at the edge of an economic precipice,” said Senator Schumer. “For an industry that has razor thin margins as it is and saw historic losses during the COVID crisis, for many family-owned organic dairy farms losing their contracts with Horizon Organics will be the final pull on the rug under them. Danone must do right by these farms and ensure their long-term economic viability.”
According to news reports, more than half of the farms slated for contract termination are located in Upstate New York. Seventeen are in Washington County and constitute nearly 20% of the county’s farms. Schumer said because of the potentially ruinous impact of the terminations on the organic dairy farmers, it is imperative that Danone provide resources and the support farms need in order to remain in operation.
Schumer requested answers to the following questions from Danone:
- Can you please confirm the number of New York farms that have been notified of contract termination and their locations across the state?
- What is the timeline and process for termination?
- Can you explain why the contracts were terminated and what process Danone underwent to come to this decision?
- What services, opportunities, and/or relief will be provided to the impacted farms and farmers?
- What aid, if any, will Danone be giving to the impacted farms to gain employment or contracts elsewhere?
- Once these contracts are complete, how many farms in New York State will Danone be working with and what is the average herd size at those farms?
- As you may know, the United States Department of Agriculture (USDA) recently reopened their comment period regarding the Origin of Livestock rule. Currently, the statute is somewhat vague and has created an unequal playing field for organic producers in New York. What, if any, role did the USDA’s Origin of Livestock rule play in this decision?
Schumer also recently called on U.S. Department of Agriculture Secretary Tom Vilsack to move to close organic loopholes and use whatever funding sources and programs available to support small and mid-sized organic dairy farmers ASAP. Specifically, he called on Secretary Vilsack to act on the Origin of Livestock Rule, which was first initiated in 2015, to close a loophole that has allowed large-scale producers in some states to rotate animals in and out of organic management and sell under an organic label. The senator argued that not only does this practice threaten the livelihoods of small- and mid-size organic dairy farmers, but it also undermines consumer confidence in the organic label, leading to an overall negative view of the entire industry. Therefore, Schumer called on USDA to finalize the Origin of Livestock rule, and close the loophole in organic dairy farming.
Schumer also called on USDA to use any and all tools at the agency’s disposal to support the farmers affected by Danone’s decision to terminate contracts and work with stakeholders to expand market channels for their products. This includes expanded support through the USDA’s Pandemic Assistance for Producers program, targeted investments in processing capacity and transportation efficiencies for businesses that can contract with these farmers, as well as temporary price supports to allow these farmers to transition to new markets.
Senator Schumer’s full letter to Danone appears below:
Dear Mr. Grant,
I write to inquire about Danone’s recent decision to terminate a reported eighty-nine contracts with organic dairy farms in the Northeast. According to the Albany Times Union report from September 17, 2021, more than half of the farms impacted —forty-six—are located in Upstate New York, including seventeen in just Washington County – nearly 20% of the county’s farms. Considering the significant impact to Upstate New York farms, communities, and local economies, most in the North Country region, I ask that you provide some detailed information regarding Danone’s recent decision to terminate the contracts, how this decision was reached, the projected timeline, and what communication and resources have been and will be provided to the impacted farms across the state.
With Danone North America located in White Plains, New York, I’m confident that Danone is aware that New York’s organic dairies produce some of the best organic dairy products in the nation and our dairy farmers are a vital part of our state’s culture and economy. As of 2019, New York had approximately 600 organic dairy farms which produced more than 386 million pounds of milk and represented about $121 million in sales. Many of the New York organic farms Danone contracted with made the transition to organic farming specifically to work with Danone in order to secure a reliable and sustainable income source and become more environmentally-conscious to combat the ever-growing challenges presented by climate change. Losing contracts with Danone will create additional hardships for our organic dairy farmers, many of whom are still struggling to recover from the supply chain disruptions, shifts in consumer demands, and other economic hardships exacerbated by the global health and economic crises of the past year.
I seek to gain clarity regarding Danone’s recent decision. Your replies to the following question would be deeply appreciated:
- Can you please confirm the number of New York farms that have been notified of contract termination and their locations across the state?
- What is the timeline and process for termination?
- Can you explain why the contracts were terminated and what process Danone underwent to come to this decision?
- What services, opportunities, and/or relief will be provided to the impacted farms and farmers?
- What aid, if any, will Danone be giving to the impacted farms to gain employment or contracts elsewhere?
- Once these contracts are complete, how many farms in New York State will Danone be working with and what is the average herd size at those farms?
- As you may know, the United States Department of Agriculture (USDA) recently reopened their comment period regarding the Origin of Livestock rule. Currently, the statute is somewhat vague and has created an unequal playing field for organic producers in New York. What, if any, role did the USDA’s Origin of Livestock rule play in this decision?
In New York our organic dairy farms are sewn into the very fabric of Upstate New York. It is critical that these organic dairy farms receive the support they need to remain in operation and the information necessary to map out their futures.
Thank you for your attention to this important matter. I look forward to receiving your response.
Sincerely,
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