Co-ops hope for higher price from BST-free milk

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(Host) The region’s largest dairy cooperative hopes to get more money for farmers who promise not to use an artificial growth hormone.

The Agri-Mark cooperative is under pressure from major milk buyers, who say consumers don’t want milk from the hormone-treated cows.

VPR’s John Dillon reports:

(Dillon) Farmers use the growth hormone to boost milk production. The U.S. Food and Drug Administration ruled in 1993 that the product was safe for animals and people. But BST, as the hormone is called, has never won wide acceptance in the marketplace.

Sales of organic milk are booming. And now major milk companies such as HP Hood and Dean Foods want to market milk as BST-free.

Vermont Agriculture Secretary Steve Kerr says farmers have to respond to market demands.

(Kerr) “I think that Dean Foods and HP Hood are good proxies for at least the majority of consumers. They’re smart big, professional marketing companies. They are far closer to consumers than we are on the farm. So I think it’s unwise for us to ignore what they believe to be the case in the marketplace.”

(Dillon) Nationally, about 20 to 30% of dairy farmers use the hormone, which is made by the Monsanto Corporation. No figures are available for Vermont. Kerr says farmers need to be paid more, if they agree not to use the hormone.

(Kerr) “If we’re compensated for no longer using BST, then no longer using BST makes sense. If we’re not, then I suspect we have a very difficult time ahead of us.”

(Dillon) Doug DiMento is a spokesman for Agri-Mark. The co-op sells milk to HP Hood, and DiMento says it’s trying to honor its customer’s demand to supply milk from untreated cows.

(DiMento) “We definitely want to make the customer happy, but at what price?”

(Dillon) The Agri-Mark board is meeting this week to discuss the issue. At the same time, a consortium of regional cooperatives has joined forces to negotiate a higher price for the BST-free milk.

(DiMento) “Milk prices are the lowest they’ve been in 25 years almost. And if a farmer is using some technology that is making him money at this point time, and he’s asked to give that up, he’s going to want to be compensated for that.”

(Dillon) Agriculture Secretary Kerr says his advice to farmers is to wait for the outcome of the negotiations.

(Kerr) “So if this turns out to be some passing storm or some misreading of the public, heck, we just keep using BST. Monsanto will be happy to continue selling it. If, however, this is a correct reading of the public, then we ignore it at our peril.”

(Dillon) Agri-Mark hopes to negotiate a premium of $1 for every 100 pounds of milk. But so far, the major milk buyers have not agreed to pay anything extra for milk from untreated cows.

For Vermont Public Radio, I’m John Dillon in Montpelier.

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