Sorry, Houston, No Farm-Fresh Milk for You

dairy.jpg
U.S. Department of Agriculture
Dairy life looks peaceful, but there are some scary politics at work in the industry.
Here's a riddle: Why would a dairy choose to stop selling milk to Houston resellers for $5 a gallon and instead sell it all to a giant co-op for a mere $1.62 a gallon?

The answer? Unbearable pressure.

Local milk producer Way Back When Dairy, run by the Ganskey family, has become a valued resource for restaurants, coffee shops and small retailers who want to offer fresh, local milk. They've also been a regular vendor at the Urban Harvest Farmers Market on Eastside on Saturdays. The small dairy has been selling a portion of its weekly production to places such as Revival Market, Underbelly and Greenway Coffee & Tea, as well as to individuals who attend the farmers' market.

This was no small feat on the part of the Ganskey family. They'd drive their refrigerated truck into Houston on Friday, a 200-mile trip one-way, to make deliveries. They'd spend the night in Houston, then get up bright and early to sell the balance of their milk at the Urban Harvest Farmers Market. Then they'd make the long drive back to the farm.

milk.jpg
Matthew Cray-chi
Take a long look, because this might be the last time you see these jugs for a while.
Concerns about additives in commercial milk, such as hormones and antibiotics, set the stage for an eager response to Way Back When's milk from health-conscious Houston consumers. Way Back When also enabled local businesses to provide high-quality products that people could feel good about.

"Sourcing local, high-quality and sustainable products is a responsibility that we have to our community that supports us. It is irresponsible to sell low-quality products when we have the opportunity to provide a much higher standard," said Max Gonzales of Catalina Coffee.

Greenway Coffee typically went through 40 gallons a week, while larger Catalina Coffee used a whopping 100 gallons. David Buehrer of Greenway Coffee & Tea, who has purchased the milk for the past several months, estimated that local businesses and individual market shoppers may have purchased 30 percent of Way Back When Dairy's production weekly. Sadly, it has not been enough to enable them to continue their independent sales.

With only a small percentage of the milk being purchased by independent entities, the dairy had to also sell the bulk of it to another organization: a co-op named Dairy Farmers of America, or DFA for short. "Co-op" sounds like some kind of small community group, but DFA is a behemoth. It has more than 4,000 employees and secures milk from more than 15,000 dairy farms.

Mark Ganskey of Way Back When says that DFA has issued an ultimatum that either the dairy sells all of their milk to them, or the co-op would no longer purchase any of it. "They said we could either give up our bottling permit or our commercial permit." Even before the ultimatum, DFA was charging the Ganskeys 50 cents per bottle for each bottle they sold independently. "They were charging us a transportation fee, even if they had nothing to do with it."

I requested a statement from Dairy Farmers of America on their buying practices and received this via e-mail from Kristi Dale, their Director of Media Relations:

"As part of their agreement with Dairy Farmers of America, all dairy farmers who choose to be DFA members are expected to market 100 percent of their milk production through the Cooperative, with the exception of milk for home consumption. This ensures that, in the cooperative spirit, all members are sharing equally in the market. In certain circumstances, DFA allows members to buy back a portion of their milk production at federally regulated market rates for their own commercial use. A condition of this arrangement is that members are required to comply with federal milk pricing regulations and any other relevant state or local rules, including reporting their complete production volume to DFA."

Why does DFA want so badly to make sure that dairy farmers sell all of their production to them? By making sure the farmers have no other customers, the DFA has the freedom to set prices to whatever they see fit, in this case, $1.62 a gallon.

underbelly_raises_a_toast.jpg
Underbelly/Chris Shepherd
The staff of Underbelly say good-bye to Way Back When Dairy's products with a milk toast.
Mark is not happy about having to withhold his farm's milk from his longtime customers. "We've spent five years building up clientele in Houston. We have a heck of a market there. Those people are not just our customers, they are our friends."

Mark Ganskey asserts he did not breach his agreement with DFA. "We were not breaking contract, because they made us report how much milk we bottled. We had to pay them for the ability to bottle some of our milk," he explained.

Even if Way Back When hit a break-even point monetarily by selling fewer gallons at the higher prices to resellers, the cows producing the excess would have to be sold. That's a financial loss that would be unbearable for the Ganskeys. "Look at the drought last year," said Mark. "No one wants to have to buy feed for a bunch of cows."

"When we started in 1989, there were 56 independent dairies in our county," said Mark. "Now there are only three left. We've lost four producers in the past month." (Way Back When Dairy is in Cherokee County.)

The loss of accessibility to Way Back When milk has sent restaurants and retailers scrambling to find a replacement supplier. Max of Catalina Coffee called an "emergency dairy summit" yesterday morning to discuss the available options. Company representatives from Fat Cat Creamery, Southside Espresso, Pearland Coffee Roasters, Greenway Coffee & Tea and Sycamore Grounds were in attendance. As Max pointed out, "Many of us in attendance are local coffee roasters, so we also represented our clients who use Way Back When Milk."

Morgan Weber of Revival Market explained why Way Back When Dairy's milk was preferred by so many companies. "Way Back When Dairy was producing a product that met everyone's standards at a price most could afford. Not all milk producers are created equal. Not only are we losing a small producer, but one that produces exceptionally high-quality milk."

I asked Mark if he had enough customers in Houston who could buy all of his production if he'd have to continue dealing with the co-op. "No, at that point we could let them go," he replied.

So, if you know of anyone who can buy 2,500 gallons of milk per week, you might want to let Way Back When Dairy know. You can also follow them on Twitter to keep up with new developments.



Follow Eating Our Words on Facebook and on Twitter @EatingOurWords

Location Info

Revival Market

550 Heights Blvd, Houston, TX

Category: Restaurant

Catalina Coffee

2201 Washington, Houston, TX

Category: General

Underbelly

1100 Westheimer Road, Houston, TX

Category: Restaurant

Southside Espresso

904 Westheimer Road, Houston, TX

Category: General


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50 comments
TXLadyPrepper
TXLadyPrepper

That's sad! I wish I lived closer to Houston; I'd buy some fresh milk from Way Back When for my family.

sensestorm
sensestorm

@sketchwerk Indeed, it certainly does suck. :(

Rachele Ruth-Hardy Tycksen
Rachele Ruth-Hardy Tycksen

Isn't there something more that can be done! Surely with social media the way it is today we could spread the word and organize a massive boycott?

AmiAudible
AmiAudible

@sensestorm @waybackwhen415 @EatingOurWords Caught this article yesterday. Appreciate the light you shed on subject.

vonHaupstadt
vonHaupstadt

I'm sneered at by most local coffee shops when I choose to put dairy into my coffee, so I'm happy they have a heart for milk after all.

James Stephens
James Stephens

That blows... They are the closest thing to raw milk I could get

Jalapeno
Jalapeno

Hells bells, HP, stop the "in case you missed it" pop up.  I know you know that's annoying.

AllisonHiromi
AllisonHiromi

@sensestorm @waybackwhen415 @eatingourwords well written, Phaedra! That piece taught me (and I'm sure many others) a lot today.

Occupy Food
Occupy Food

Thanks Houston Press. This is exactly what is happening to small farmers around the nation. They are being squeezed the Dean Foods. It's an organic milk war at the very top and the consumer and small farmer are losing. People ask why we support raw milk, do social media protesting, boycott Horizon Milk, advocate for organic almond milk, well look all around. The small milk farmers are all being squeezed into contracts with the few monopolies at the top. When will people start connecting the dots and see what is really going on.

Bitspitter
Bitspitter

@drricky Specifically: "it doesn't get secreted into the milk."

Bitspitter
Bitspitter

@drricky Sure, and of course I knew that, but that wasn't what your tweet said.

CoastieGM
CoastieGM

This is not difficult.

 

The Ganskeys should start a new corporation on paper. Have the new corporation "buy" a few cows and lease equipment from "Way Back When". 

 

Way Back When then sells milk to the co-op only. The new paper corporation only sells directly to the public. 

 

Problem solved. Just keep the paperwork straight.

ronsutton1776
ronsutton1776

It sounds like he made an agreement with DFA and now doesn't want to abide by the terms of the agreement.  His assertion doesn't really make sense, so I'm guessing he didn't know what he was signing or decided after the fact not to care.  But that's just a guess.

 

I don't have to guess that a dairy located ~200 miles from Houston is not and cannot reasonably be described as being "local" to Houston, and yet that's exactly what Ms. Cook did right at the beginning of graf 3.

 

Absurd.

sensestorm
sensestorm

@AmiAudible @waybackwhen415 Thank you for reading. This is just the tip of the iceberg, as this has been happening for years in America.

sensestorm
sensestorm

@AllisonHiromi Me too. I have learned a TON about the dairy business this week, and none of it is pretty.

drricky
drricky

@Bitspitter IT = hormones injected into cow. Don't. Get. Into. Milk. Mainly rBST. Other hormones made by cow goes into milk.

drricky
drricky

@Bitspitter but if we're talking about endogenous hormones, well, changing to local sourcing isn't going to change that.

phaedra.cook
phaedra.cook

 @CoastieGM That sounds like something the Ganskeys certainly might consider. Thank you for the well-considered idea! I've relayed this to them.

phaedra.cook
phaedra.cook

 @ronsutton1776 Ron, I think Kylejack sufficiently answered the "local" question. Regarding the agreement... that's why we asked Mr. Ganskey for clarification. DFA stipulated a "buyback program" for milk the dairy sold themselves. That's why they were paying the 50 cents per gallon for each gallon they bottled independently. That indicates that the direct sales weren't initially prohibited...but they certainly were penalized. Thank you for the comment.

Kylejack
Kylejack topcommenter

 @ronsutton1776 Congress defined local as within 400 miles in the Food, Conservation, and Energy Act of 2008 (HR 2419). What do you think is a reasonable description for local, and on what do you base your belief on?

Bitspitter
Bitspitter

@drricky Haven't had time to read the papers you listed, of course, but I have read others that suggest otherwise. Just collecting evidence.

Bitspitter
Bitspitter

@drricky Only thing I was questioning is whether hormones get secreted into the milk. 'Not biologically significant' ≠ doesn't happen.

ronsutton1776
ronsutton1776

 @Bitspitter "We were not breaking contract because they made us report how much milk we bottled. We had to pay them for the ability to bottle some of our milk..."

 

That one.

ronsutton1776
ronsutton1776

 @Kylejack Ah yes, if Congress says local is within 400 miles, that must make it so, huh?

 

I think a more reasonable and definition of local would be something in the near vicinity of the Houston metroplex, not something that's closer to fucking Dallas.

AlexanderF
AlexanderF

@sensestorm 2 or 3x is a physical limit, small or large farm.

kylejack
kylejack

@drricky @sensestorm Not commenting on hormone factor, only taste

drricky
drricky

@sensestorm @kylejack post hoc ergo propter hoc.

drricky
drricky

@sensestorm I didnt say anything about it being good or bad. Just correcting that hormones are not added to the milk.

sensestorm
sensestorm

@kylejack @drricky Dairy-direct milk always has tasted better to me as well, even when I was a child. My kids love WBW.

kylejack
kylejack

@sensestorm @drricky I don't know if it is fat content or what, but WBW tastes way better than whole milk from the store.

sensestorm
sensestorm

@drricky Nor, frankly, would I feel qualified to write that paper without a whole lot of research. Not what I want to be writing.

sensestorm
sensestorm

@drricky That article has zero to do on whether or not milk from cows injected with hormones is good or bad.

drricky
drricky

@sensestorm the papers I cited have actual biochemical analyses of the milk. Check against what ur reference is

drricky
drricky

@sensestorm preference has nothing to do with it.

drricky
drricky

@sensestorm I am clarifying the misconception that hormones are added to the milk. Hormones may be injected to the cow not the milk directly

sensestorm
sensestorm

@drricky I would guess that the bigger and more commercial the farm, the more often the cows are milked.

sensestorm
sensestorm

@drricky What I have read indicates that another issue is that the more a cow is milked, the more natural hormone is produced.

sensestorm
sensestorm

@drricky What is wrong with a consumer preferring a product that has no added hormones?

drricky
drricky

@Bitspitter yeah, I expected the whole thing with chemophobia and all. But not worth it.

Bitspitter
Bitspitter

@drricky You'll have fun with false equivalency (of the chemical sort) in the Truffle Oil article.

drricky
drricky

@Bitspitter it's a problem of false equivalency in the rhetoric. Subject of a future blog post.

Kylejack
Kylejack topcommenter

 @ronsutton1776  @Bitspitter What doesn't make sense about it? I don't see any mention in the story of DFA accusing them of breaking the contract. What they're alleging is that DFA took the anti-competitive step of telling them that they could sell all of their milk to DFA or none of it. WBW says they're in compliance with the contract, but that DFA has nevertheless issued this ultimatum.

Kylejack
Kylejack topcommenter

 @ronsutton1776 No need to get angry, I was just curious how you make your determination of what is local. So is it always based on the size of the metroplex? For example, if I live in Odessa, TX should I just draw a Houston metroplex-sized circle around myself to determine what's local? Or do small towns have a much smaller "local" footprint? These questions of what constitutes local are very interesting to me.

 

Regardless of whether you object to the use of the word local, part of the idea behind local is reducing the carbon footprint of a product coming to market, conservation, basically. Milk sold to the DFA would have to be trucked to them, then trucked to the retailer like Oak Farms, then trucked to a store, and finally brought home to drink. Not just the trucks, but also consider all the overhead of a company like Oak Farms and of DFA with their various facilities using resources. Just think of how much of that can be avoided by one trip from Way Back When to the farmers' market.

phaedra.cook
phaedra.cook

 @ronsutton1776  @Kylejack Ron, we can certainly agree to disagree on what "local" means. Chefs do it all the time. ;)

 

It is certainly factual that the dairy sells a Texas-produced product here in Houston, where most of its customers are. Many Houston businesses and consumers have been affected by them pulling it from the market. This has had a significant, local impact.

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