Family Milk cow project: Raw milk and money

I've written a series about raising a family milk cow.  To see the first entry in the series, click here.
To see the previous entry in the series, click here.

I look at a family milk cow as being part of a basic ladder of farm animals that a homestead needs.  My personal goal is to raise as much of the food that I eat as I can.  I look at a family milk cow as being a step along that progression.

Anytime I look at adding an animal to my farm it's part of my nature to look at the money that it might make for the farm, and there's something very interesting about raw milk right now.

It's selling for $13 a gallon. 

For me, at that price, it's very interesting.  A good cow will produce between 4 and 6 gallons of milk a day -- and that means a potential revenue of $52 to $78 a day.  Using the lower figure, and figuring on a milking cycle of 10 months, we're looking at a revenue of $15,600 per cow. 

The sharp reader will note that I'm skipping various costs; licensing, feed, shelter, equipment and so on, but the bottom line is that it's an interesting enough business that it's worth exploring a little. 

Dungeness valley Creamery reports on their website:

"...Besides selling milk at the dairy, the Brown’s sell their milk in a number of stores across Washington. They can sell their milk for 4-and-one-half times the price they received when they sold it to the coop. While there are some new expenses, the profits, besides keeping Sarah on the farm, have allowed the Browns to hire additional help...."

Now that sounds pretty darned good for the business model.  Sell the same product at 4.5 times the price other people do, keep the family on the farm, provide a good income.

The downside is that there's always the chance that your dairy operation will get linked to an outbreak of something.  Dungeness valley Creamery had that problem in 2009:

"...The patients all report drinking raw milk produced by the Dungeness Valley Creamery in Sequim. No E. coli has been found in samples from the dairy's current batch of milk, but during an investigation at the dairy, WSDA found the same bacteria that caused one of the illnesses...."

I want to be clear here:  I don't make any judgement on Dungeness Creameries product or practices, and I don't know anything more than what I've read.  But even if you're not at fault, defending yourself against civil suits costs money, and sometimes a lot of money.  


Food liability law
Jason Foscolo is an attorney whos area of practice includes food law and related disciplines.   Here's what he says about raw milk in this blog entry:

"...The reason we are seeing more outbreaks also stems from ignorance of the law. Even in states where selling raw milk is legal, dairies still have to face strict liability in civil court for the harm caused by their products. If farmers had a better understanding of the almost-absolute duty the law imposes on them to make food that is safe to eat, they would either leave the raw milk business altogether or implement the technologies and practices that would lower the overall incidence of infection. The up-tick in outbreaks tells us neither is being done, and that is a shame for the farmers who may have to part with land to compensate the sick."

So let me paraphrase what he's saying here:  If the outbreak of illness is serious enough, you may lose everything in the resulting lawsuits related to the outbreak.   You may lose your farm or some portion of it.  That's a pretty serious penalty.

Distributors and retailers are at risk, too.

Whole foods and Puget Sound Consumers Coop (PSCC) no longer carry raw milk products on their shelves.  There are probably a variety of reasons for that choice, but one of them might be what happened to Jensen farms.

A quick summary:  Cantaloupe grown at this Colorado farm were linked to an outbreak of illness in 2011.  The outbreak was serious, and the cantaloupes were shipped to 30 states.  According to the story linked to above, the outbreak of illness killed at least 30 people, sickened at least 146 and caused at least one miscarriage.  

Jensen farms itself has declared bankruptcy.  The company that installed equipment and a safety-audit firm and the insurance that the farm itself had resulted in a pool of about $4 million to pay the victims, but it doesn't end there.  From the story:


"...The plaintiffs might also pursue claims against others involved in the distribution and sale of the cantaloupes."  Bill Marler, attorney for 39 of he plaintiffs.

This is a huge risk, and one that many small producers of milk or food products in general might overlook.  With this in mind, it makes selling the raw milk a lot less attractive.

 Managing risk
Businesses usually manage this sort of risk by both adopting the best practices and by carrying both the right kind of and an adequate amount of insurance.   If I were to start a raw milk operation I'd probably want to spend a reasonably large sum of  money on attorneys to set up a business structure that would help my farm survive in the event of an outbreak. 

Here's a fellow who was apparently involved in the Dungeness creamery outbreak:

"Greg - January 15, 2010 7:39 PM

I am a huge supporter of raw milk and of buying all my food local, but I am also the "Vancouver man in his 30's" who got sick presumably from this milk. While I know it could have been from a number of sources, I am fairly sure it was the milk. I purchased the 1/2 gallon on Oct 28th at Whole Foods in Vancouver and took it straight home. I poured a big glass, took 2 huge gulps and nearly threw up, it was absolutely awful. It was acrid and sour and smelled so bad I nearly threw up again. Four days later my stomach started hurting, 7 days later I was in the ER in incredible pain. I missed nearly 3 weeks of work it was so bad. While I am nearly positive it was the milk, I did not lawyer up like the others and have asked nothing from the company, that would go against everything I believe in, although it did make me look a little stupid to get sick from something I am always telling others to do. Maybe one day I will have the nerve to drink raw milk again but not yet. "


I must say that I admire Gregs resolve and convictions in this case; he believes in choice and that he made an informed choice and decided to take responsibility for that choice personally.  But I can't bet my farm on finding customers who have Greg's amazing willpower to stick to his principles.