Several Maine organic dairy farmers are calling for a nationwide boycott of all HP Hood products, including the Stonyfield brand of organic milk, to call attention to what they say are unfair business practices.
Citing the economy, Hood declined to renew dairy contracts of about eight Maine farmers in February. Later, the company sent terminations to two additional farmers, Mark McKusick and Richard Lary. The McKusicks claim the company is dropping farmers who complain, and officials of the Northeast Organic Dairy Producers Alliance say Hood is making it difficult for organic dairy farmers to stay in business.
"It is immoral," said Ed Maltby, executive director of the Northeast Organic Dairy Producers Alliance, one of several groups advocating on behalf of the farmers. "You have seen Organic Valley and Horizon, who are suffering as well, but they have honored the contracts and agreements."
Hood officials say they gathered input from the company's dairy producers before implementing changes.
"We have a softening of the economy and an oversupply of organic milk, and this has forced us to make some hard decisions, and it is impacting some of our farmers," said HP Hood spokeswoman Lynne Bohan. "We don't take this lightly and we continue to work with the industry to minimize the impact, including the impact on our organic farmers."
Maltby said many of the farmers who took out loans to transition to organic, which can cost tens of thousands of dollars, were "promised a solid future."
That future, however, is increasingly becoming uncertain for organic dairy farmers. Through 2008, organic grew to about 25 percent, but this year, sales have dropped to about 7 percent. Organic milk has taken the biggest hit as many consumers, looking to save money during the recession, returned to conventional milk. The move has resulted in an oversupply of organic milk. To address the surplus, Organic Valley and Horizon Organic have either lowered their pay price, or called for a reduction in production.
HP Hood is allowing the contracts with some of its milk producers to expire. The company also is requiring those farmers who remain under contract to sign an amendment to their existing contracts that allows Hood to set pay price on a monthly basis.
"With Hood, no one has a say in how much they are going to get," Maltby said.
Bohan said the company met with its organic milk producers before making the decisions, and they didn't want a reduction in production to be implemented. In terms of the pay price, she said it is based on what the company is able to market and sell in today's economic climate. The farmers will be paid based on a percentage of what they produce. In other words, Hood will take all the milk from their remaining farmers, and 70 percent of it will be paid by organic standards, the remainder will be paid based on a formula dictated by both organic and conventional pricing models.
"That number will change from month-to-month," she said. "We received a good response from our farmers."
One jilted Maine farmer, Matthew Oliver, said he understands Hood had to terminate some contracts — including his — to keep its business going, and he believes a boycott will only serve to hurt those farmers still in business.
But Maltby disagrees that Hood has remained open to all the farmers' concerns. That is why they are calling for a boycott.
"The thinking behind the boycott is not to have consumers stop buying organic milk, but to be educated about what is happening to organic farmers," Maltby said. "The nature of the boycott is out of frustration with Hood and Stonyfield. They have refused to meet with the farmers and look at different ways to address this problem."
Bohan said the company was open to sitting down and talking with the terminated farmers, but they wanted to bring a lawyer in. At that point, she said, the company felt the discussions should be conducted only through legal representatives.