At a time when dairy farmers in Maine and across the country are facing numerous challenges affecting the milk market and resulting in low prices to producers, multiple Maine organizations have joined with Maine organic dairy farmers to investigate alternative market opportunities. A Local Foods & Farmers Market Promotion Program (LFPP) grant from the USDA was recently awarded to MFT, written in collaboration with the Maine Organic Milk Producers, Maine Organic Farmers & Gardeners Association, Coastal Enterprises, Inc., and the University of Maine Cooperative Extension, to execute a feasibility study to determine whether in-state processing could enable better market stability for organic dairy farmers. This successful proposal was also bolstered by support from the Maine Dairy Industry Association, Maine Department of Agriculture, Conservation and Forestry, Maine Farm Bureau, Wolfe’s Neck Center for Agriculture and the Environment, and the Congressional offices of Sen. Collins, Sen. King, Rep. Poliquin, and Rep. Pingree.

“Dairy farms play a keystone role in Maine’s farm and food economy,” said Amanda Beal, President and CEO of Maine Farmland Trust. “This feasibility study has the potential to benefit all dairy farms in Maine, as losing even one dairy farm can have a sizable impact on the agricultural sector and economy, and we know that having multiple market options increases the resiliency of these farm businesses.”

Milk produced by the dairy sector represents Maine’s second most valuable agricultural product; sales value reached nearly $125 million in 2017. All of Maine’s dairy farmers face challenges due to existing political and market forces, which MFT and other partner organizations actively work to address on an ongoing basis through state and federal policy.

However, certified organic farms, which account for nearly one-third of Maine’s dairy farms, face additional challenges as Maine lacks in-state processing infrastructure for their milk.  While the organic market was once relatively resistant to the fluctuating price, supply, and sales of milk and milk products, this is no longer the case.  Adding to the unease for organic producers is the fact that all bulk organic milk produced in Maine is shipped out of state for processing.  This creates a dependence on processors operating in the national milk market, who can get milk elsewhere. This dynamic recently resulted in several organic farmers losing their contracts with an out-of-state processor.

The feasibility study will examine the current needs of Maine organic dairy farms, estimate market-size for in-state processing infrastructure, evaluate various business models and run financial analysis to determine the viability of business models. The study will draw from the experience of MOOMilk, an in-state organic processor that closed in 2014. While many factors contributed to MOOMilk’s closing, the processor’s sales showed strong consumer support for a Maine organic dairy brand.

“Exploring the idea of in-state processing is so exciting for those of us currently in the organic dairy industry,” said Annie Watson, co-owner and farmer at Sheepscot Valley Farm in Whitefield. “This is an opportunity to take an in-depth look at the current landscape of Maine organic dairy. If there is a market for our product on its own label, or in conjunction with a larger processor, we owe it to the future of dairy in our state to seriously consider the possibilities.”

Due to the urgency of the current dairy crisis, partnering organizations plan to finish the study within six to seven months, in hopes to inform some near-term action to expand in-state processing opportunities for our dairy farms.