CELEBRATING 100 YEARS OF THE HISTORY OF TWO DAIRY COOPERATIVES

This year is the 100th year of operation of two well known cooperatives that have farmer members in Vermont, the St. Albans Cooperative and the Cabot Cooperative.  Both were started in 1919, at a time of great economic turmoil in the US, when prices to farmers were being challenged.  As business units, both have changed over time to better meet consumer and their farmer member needs.  Cabot merged with AgriMark Dairy Cooperative in 1992 and today is part of a larger cooperative organization that serves its farmer members in the New England States and New York.  Cabot is well known for its specialty cheddar cheeses.  St. Albans today supplies both Ben and Jerry’s with quality cream for its Ice Cream, and Commonwealth Dairy with milk for its yogurt.

The early 1900’s was a very interesting time in agriculture in Vermont as well as the entire United States. Due to the economic disparities between urban and country life in the late 1800’s and early 1900’s, President Teddy Roosevelt had created the Country Life Commission.  The recommendations from this commission were later investigated by both Presidents Taft and Wilson. They had both sent people to Europe to study agricultural cooperatives and rural credit (see 63d Congress, 1^stsession, Senate Doc 214, Agricultural Cooperation and Rural Credit in Europe, 1913, GPO).  As a result of this investigation, and based upon the report, Congress passed, and President Wilson signed, the Federal Loan Act of 1916, establishing the first part of what became known as the Federal Farm Credit System.

The late 1800’s and early 1900’s was the beginning of a period of agricultural policy activism in the United Sates.  The Grange movement was started in 1867 as a fraternal organization, but quickly became active on a number of fronts to include railroad rates, fair pricing to farmers, and promoting farmer cooperatives (see Early Cooperatives, March 7^th, 2011, Extension).  It is said that cooperatives flourished during the three decades from 1890 to 1920, and as many as 14,000 were organized after this period.  The American Farm Bureau Federation, started originally as part of Cooperative Extension, became an activist organization in the early and later 1900’s advocating for cooperatives, as well as the Agricultural Adjustment Act of 1933 (challenged in federal courts and reauthorized with changes in the Agricultural Adjustment Act of 1937, that created the Federal Marketing Order System for dairies that exist to this day).

Vermont was becoming a fluid milk state after 1890, as the cities reached out for a source of product (see www.whatceresmightsay.blogspot.com: Historical Perspective: Why Vermont Became a Dairy State, Thursday, August 23^rd, 2018).  It is interesting to note from the history, that in 1917, as head of the Federal Food Administration during World War I,  Herbert Hoover appointed a commission to determine a fair price to dairy farmers in the Boston Milk Market, a cost of production plus a reasonable profit, and a way to price surplus production during the flush milk production period (see Agriculture of Vermont, Ninth Report of the Commissioner of Agriculture, July 1916 to June 30, 1918).  It is said that this mechanism for balancing supply and demand of milk production “while quickly dismantled after the WWI Armistice, became the foundation for massive intervention in a highly demoralized industry after 1933.” (See Business History Review, Vol 55, No. 2. (Summer 1981), pp. 170-187).

Many laws were put in place over the succeeding years to address farm cooperatives and farm viability. The Capper-Volstead Act, passed to allow farmers the ability to work together on pricing, evolved after the Sherman Anti-trust Act of 1890 which did not provide needed protection to these newly formed cooperatives. This law remains one of the key elements of cooperative anti-trust law protection today.

In 1932, the Report Rural Vermont, A Program for the Future, by the Vermont Commission on Country Life, was put forth (after the major flood of 1927).  In the section on agriculture and dairy, the report suggests that the future of dairy within the state is promising, provided: 1) farmers keep down the cost of production, 2) there is a mechanism to balance supply and demand, and 3) farmers develop a more efficient marketing system.

Over the years, changes have occurred on several levels on the farm, in markets served, in transportation and communication, with technology, and within the policy environment. Today there are approximately 700 commercial dairy farms in the State, and only one of these dairy cooperatives, St. Albans, has its office within the State.  Cooperatives in the country have all changed over the years (see: www.whatceresmightsay@blogspot.com: The Vermont Story: History of Farmer Cooperatives and How They Have Impacted Vermont Agriculture, December 20, 2012). Many studies have been done relative to the role and challenges of farmer cooperatives in serving the needs of their members in the future.  These challenges are reported in the blog www.whatceresmightsay@blogspot.com. 100 years of changes have occurred within the farmer cooperative movement and in the Vermont agriculture as it exists today.  

It should be noted, that many of the so called old timers who had witnessed the sharp decline in Vermont’s world class merino sheep industry, and then the relatively quick movement away from its world class butter production, indicated that Vermont’s future was never competing with the West on a commodity basis, but in developing those products that consumers in the growing markets in the Northeast would want.  It appears that is where Vermont agriculture is today as well.  There is a need to understand the past to appreciate the future (see blog post In Vermont Agriculture and Food Systems, Understanding the Past Reinforces the Future, www.whatceresmightsay@blogspot.com).

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Note:  Roger Allbee is the former Secretary of Agriculture for the State of Vermont.  He also has been a member of the Senior Management Team of the former Farm Credit and Bank for Cooperatives for the Northeast; a former Chair of the Animal Products Advisory Committee to the a former U.S. Secretary of Agriculture and U.S. Trade Ambassador.  He lives in Townshend, Vermont with his wife Ann.