12.14.21

FOLLOWING SCHUMER’S PUSH, DANONE EXTENDS UPSTATE NY CONTRACTS TO 2023; DANONE ORIGINALLY PLANNED TO TERMINATE ALMOST 100 NORTHEAST DAIRY FARMS, BUT SCHUMER INTERVENED AND SECURED CONTRACT EXTENSION, ASSISTANCE TO IMPACTED FARMS, AND RESOURCES TO HELP FARMERS STAY IN OPERATION

When Danone North America Announced Plans To Leave Organic Dairy Farms In Upstate, Schumer Immediately Began Working To Ensure These Struggling Farmers Would Have All Resources Made Available To Help Them Survive 

After Schumer’s Direct Advocacy, Danone Will Now Extend Dairy Contracts Till 2023, Make Transition Payments To Farmers, & Provide Access To Farm Financial Consultants To Affected Farms 

Following news that Horizon Organic, a subsidiary of multinational food conglomerate Danone, planned to terminate contracts with organic dairy farmers across the northeast, U.S. Senate Majority Leader Charles E. Schumer today announced Danone has heeded his call to provide financial support and resources to Upstate New York dairy farms impacted by their decision and importantly also to extend the contracts until 2023, which were previously set to expire in August 2022, to ease the impact on farmers and give them time to transition. Schumer wrote a letter to Danone in October calling for the continued support of affected farms and said the commitment he secured from Danone will help ensure farmers have the resources and time they desperately needed to transition and remain in operation.

“New York’s dairy farmers are the lifeblood of the Upstate economy and produce some of the best dairy the nation has to offer. I’m pleased that Danone heeded my call, stepped up, and provided the impacted farmers contract extensions and the needed resources to ensure their long-term economic viability,” said Senator Schumer. “This is a wonderful early Christmas present for the dairy farmers and will allot them critical additional time and the financial payments they deserve as they move forward. I am thankful that Danone responded to my request, and I will continue to closely monitor the situation and fight to make sure these dairy farmers have all the support needed in this difficult period.”

Specifically, after Schumer’s direct advocacy, Danone has now said that they will:

  1. Provide affected producers the option to extend their current contract an additional six months, for a total of 18-months, ending on February 28, 2023.
  2. Provide a transition payment of an additional amount per hundredweight on the milk Danone purchased from these producers. Danone also is providing this additional financial support to the Northeast farmers who have already exited the network after receiving the non-renewal notification, by providing such transition payment for the milk purchased in the last six months of their relationship.
  3. Provide access, at no cost to the farmer, to farm financial consultants that specialize in providing support for the agriculture community to help plan the future of their farms.

Schumer said that this support will help ease the impact of the contract termination on the organic dairy community and create a greater window of opportunity for the farms to plan for the future.

In addition to his direct advocacy with Danone, 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 original 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:

  1. Can you please confirm the number of New York farms that have been notified of contract termination and their locations across the state?
  2. What is the timeline and process for termination?
  3. Can you explain why the contracts were terminated and what process Danone underwent to come to this decision?
  4. What services, opportunities, and/or relief will be provided to the impacted farms and farmers?
  5. What aid, if any, will Danone be giving to the impacted farms to gain employment or contracts elsewhere?
  6. 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?
  7. 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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