Re-establishing a Viable Vermont Dairy Industry: Report and Call For BOLD State Policy Change and Action

A number of you have asked for a copy of the Executive Summary of the study(Re-Establishing a Viable Vermont Dairy Industry: Report and Call For BOLD State Policy Change and Action) that was presented to the Vermont House and Senate Agriculture Committees on February 20, 2020, and has also been submitted to the Administration.  It was an in-depth two plus year evaluation of all data, background papers and reports,  existing programs, as well as future trends,  As is so well stated in the Dairy and Water Quality Collaborative Action Plan(a group of 22 Vermonters who came together in the spirit of trying to understand the complexities and inter-relatedness of farm viability and water quality):

The quality of our water, the viability of our farms and associated businesses, and the fabric of our rural communities are all at stake. Immediate, inclusive, effective, and enduring leadership and action are 

needed. That collaborative call to action further states that complex systems need an approach that Integrates economic, environmental, community and regulatory inputs and players.

Our over two year study concludes that BOLD State policies are needed to review or address Vermont’s dairy industry's future.  Without BOLD policy changes or dramatic response to this unchecked national and international market and federal regulatory pattern, the trend to fewer farms, and eventually to less milk production will continue resulting in the loss of economic activity, rural infrastructure and the working landscape that has been so important to the States culture, economy, and history.

We therefore conclude that BOLD State policy action is needed to RENEW and to ADDRESS the future of the Vermont dairy industry.   We conclude that the national market and regulatory pattern beyond the Vermont marketplace, which has tied Vermont raw milk pricing to unsustainable, inadequate and volatile, commodity dairy pricing, is not likely to be altered, and is in fact more likely to accelerate.  Therefore, Vermont MUST plot its own , new and BOLD, State-based course if there is to be a sustainable future for Vermont’s dairy industry and the working landscape it supports.

Re-establishing a Viable Vermont Dairy Industry: 

Report and Call For BOLD State Policy Change and Action

CALL FOR:     Blue Ribbon

Administration/Legislative

Vermont Dairy Industry Task Force

Task Force Charge:  

modernize and revise the State’s market regulatory authority 

to enable implementation of a Bold and Innovative State program of 

milk market regulation and economic development

Submitted to:  Honorable Phil Scott, Governor

     Vermont Legislature  

Honorable Phil Scott, Governor

·      Anson Tebbetts, Secretary, Agency of Agriculture, Food and Markets; 

·      Julie Moore, Secretary, Agency of Natural Resources; 

·      Lindsay Kurrle, Secretary, Agency of Commerce and Community Development 

Vermont Legislature

·      Tim Ashe, Senate President Pro Tempore; 

·      Mitzi Johnson, Speaker of the House

·      Jane Kitchel, Chair, Senate Appropriations Committee; 

·      Kitty Toll, Chair, House Appropriations Committee;  

·      Robert A. Starr, Chair Senate Agriculture Committee;

·      Carolyn Partridge, Chair, House Agriculture Committee; 

·      Christopher Bray, Chair, Senate Natural Resources and Energy Committee; 

·      Amy Sheldon, Chair, House Committee on Natural Resources, Fish and Wildlife;   

·      Michael Sirotkin, Chair, Senate Committee on Econ. Dev., Housing and Gen. Affairs; 

·      Michael Marcotte, Chair, House Committee on Commerce and Economic Development

We are completing a three-year assessment and report on the status and future of the Vermont dairy industry.  We present a working Executive Summary of our Findings and Conclusions.

The Report finds the Vermont dairy industry and the working landscape it supports face the gravest crisis since the Great Depression.  

·      Chronically inadequate pay prices have caused the exit of over two-thirds of Vermont’s conventional dairy farms since 2000. (2000: + /- 1500 farms; 2020: 425 farms)  

o   A combination of market trends, beyond Vermont and unchecked by federal law or regulation, are causing the chronically inadequate pay prices that have led to this hemorrhaging loss of Vermont dairy farms.

·      Increasing direct and indirect federal and state financial support has been provided in the effort to alleviate distressed farm operation, and to cover the “externality” costs of harmful farm impacts also associated with inadequate pay prices.

o   As indicated by the continued hemorrhaging loss of farms, governmental support is not sufficient to keep farms in operation and cover, long-term, externality costs. 

The Report concludes this crisis is a pivotal turning point for the state’s rural economy, along with Vermont’s cultural and historic identity as a “dairy State”.

·       The greater dairy market forces beyond the Vermont marketplace are likely to continue, unchecked by federal law or regulation.

·       Without BOLD governmental policy change and action, by the State of Vermont, to resolve the crisis, farm attrition and distressed operation are likely to persist, and the Vermont dairy industry and the rural economy and working landscape it supports will continue to confront a perilous future.  

We further find that additional, positive, changes have occurred, amidst the crisis.  

·      The Vermont dairy industry has evolved into a multi-sector industry that now includes both a substantial new in-state processing and manufacturing sector along with the historic raw milk production sector.

o   The Vermont dairy industry has become a leader in the high margin, high-valued dairy products segment of the national dairy marketplace.  

·      **The newly developed in-state manufacture of a substantial volume of Vermont raw milk production has re-established the State’s regulatory authority over its dairy marketplace.**

The report is one of optimism, because we conclude these positive changes can support the BOLD State policy action needed to renew the Vermont dairy industry’s future.

·      If harnessed, modernized and innovative exercise by the State of its revitalized regulatory authority over producer pricing, milk production and farm practices, together with a visionary economic development plan, can overcome the outside market and regulatory trends and renew a durable future for the uniquely branded Vermont dairy industry.

·      Innovative State action can also reduce the public cost of supporting a viable Vermont dairy industry.

Summary Findings

Our three-year review has assessed the history and status of the Vermont and national dairy marketplaces, and the history and development of state and federal dairy support and milk market regulatory programs.  We have also reviewed the Legislative Clean Water Act, the Treasurer’s Clean Water Report, and the “Call to action” by the Vermont Dairy and Water Quality Collaborative Working Group.  We have also evaluated the Vermont Milk Commission’s proposed federal supply control program.

Our Report identifies three dislocating changes that are causing the pending crisis.  At the same time, our report also identifies two additional, but positive, transforming changes.  We believe these additional, if less apparent, changes provide the basis for the State to devise an effective response to the three disruptive challenges, and thereby to resolve the crisis and renew the industry’s future. 

We find first that the industry’s historic anchor position as raw milk supplier for the Boston beverage milk market has all but been eliminated.  Second, the regional and national dairy industries have been restructured by radical market consolidation and concentration, unchecked by application of federal antitrust enforcement.  This unchecked and transforming change is the primary cause of depressed producer prices. 

Third, the long-standing federal dairy regulatory program has not been adapted to the marketplace’s reconfiguration to commodity manufactured dairy products and away from beverage milk.  Most critically, the program has been unable to respond to the new national and international market patterns of inadequate and volatile producer pay prices, and the continual production of excess raw milk supply. 

As a result, the Vermont dairy industry is now tied to volatile and inadequate commodity pricing, set by national and world market commodity price patterns having essentially no connection to the Vermont market and over which the Vermont industry has no control.

Many federal and state governmental support programs have been implemented over the years to respond to the chronic financial pressures on the farm.  Among others, these have included direct subsidy payments, the purchase development rights, land use taxation reduction, loan interest reduction, business development assistance, and federal margin protection and insurance payments.  As indicated by the continued, hemorrhaging loss of dairy farms, these programs, while certainly beneficial, have served only to partially alleviate the chronic operating loss.

Our study further finds that cash flow pressure caused by chronically inadequate pay prices is the primary cause of excess, distressed milk production by Vermont dairy farms.  This is a critical finding regarding water pollution and other problematic dairy farming practices, which have intensified and complicated both the crisis facing the industry and its resolution.  

Dairy farms receiving inadequate pay prices often cannot afford to incur the cost of employing farming practices needed to prevent water pollution and other problematic dairy farm impacts.  As unpaid for “externalities”, these problematic impacts have then created need for public financing to correct.  

Inadequate pay prices and resulting distressed milk production may thus also be understood as causing these associated problems and the substantial public financing cost required to pay for remediation. 

This combination of transforming market change, legal and regulatory failure, and external financial pressure has had a severely negative impact on Vermont’s conventional dairy farms.  Today, the hemorrhaging loss and consolidation of dairy farms leaves fewer than 450 conventional dairy farms in operation.  

Unimaginably, St Albans Cooperative, the lead and enduring Vermont dairy cooperative, has merged with Dairy Farmers of America, the dominant national cooperative.  This merger leaves conventional Vermont dairy farmers with but two remaining major cooperative outlets for the sale of their raw milk product.  With the pending merger of DFA and Dean Foods, the two cooperatives operating in Vermont, in turn, could have but one other remaining large-scale beverage milk processor customer in the New England region.

We further find that there is no indication of likely change in these market, legal and regulatory trends at the national level.  To the contrary, all evidence indicates the federal government will not alter course to reinstitute aggressive enforcement of the antitrust laws, and that, in the absence of cooperative initiative, USDA will not institute significant change to the federal milk market regulatory program. 

To challenge this trend, the Vermont Milk Commission has recently called for institution of a national supply management program.  We agree that a national supply management program would directly address the most fundamental defects in the current operation of the nation’s dairy industry, and could go far to resolve the pending crisis.  Our review indicates, however, that implementation of this needed federal program is very unlikely to happen. Most significantly, the leadership group of the nation’s dairy cooperatives is formally opposed.  There is no indication that the federal government will pursue such a policy in the absence of major cooperative support, and every indication that no action will be taken without such support.  In view of this industry position and lack of federal leadership, pursuit of a national supply management program, even if a viable option, cannot be relied upon to sustain the future viability of the Vermont dairy industry.  

Finally, we find that the national cooperative leadership appears to be moving toward greater, entrenched support for the continued allowance of unchecked market-wide consolidation, which now also includes an accelerating trend toward greater scale and size of dairy farm operation.  This latest development involves the establishment of mega-scaled dairy farm operations in other regions of the country that have greater capability to withstand volatile and low commodity pricing.  This recent development is further problematic for the Vermont dairy industry because, even if desirable, both natural and market forces absolutely preclude the establishment of similarly scaled, competitive dairy farm operations in Vermont. 

In sum, our study finds that Vermont dairy farming as we know it is being dismantled by market forces operating beyond the Vermont marketplace, unconstrained by federal law or regulation, which have left the operation of Vermont farms tied to chronically volatile and unsustainably low, commodity-based, pay prices.  

We further find that without change or dramatic response to this unchecked national and international market and federal regulatory pattern, by 2030, the Vermont dairy industry could have fewer than 100 conventional dairy farms and substantially reduced milk production, with associated loss of economic activity, rural infrastructure and working landscape.  

**************************

Fortunately, our review has disclosed that a positive reconfiguration of the Vermont dairy industry has also occurred, amidst all of the dislocating changes identified above.  If less apparent, we find that this positive reconfiguration has resulted in two equally transforming changes that, together, hold great promise for resolving the current crisis.  

First, we find that the Vermont dairy industry has been completely reconfigured into a multi-sector industry that now includes a substantial and diverse new in-state processing and manufacturing sector, along with the long-standing raw milk production sector.  The leading manufacturing companies combine with Booth Brothers to establish a substantial base for thus new manufacturing and processing sector. The sector’s diversity includes the significant leadership position of Vermont dairy farms and companies in the development of USDA certified organic milk and dairy products.  Vermont also leads in the development of innovative farmstead niche operations. 

This evolving and diverse new in-state processing and manufacturing sector combines to utilize more than half of Vermont’s 2.7 billion pounds of raw milk production.  This amounts to a substantial volume of raw milk production, process and manufacture, able to continue to support substantial economic activity, along with the significant, related rural economic infrastructure.  

Most importantly, the products of the State’s newly configured industry are leading competitors within a strongly differentiated, high-end, segment of the dairy industry.  Ben and Jerry’s Homemade, Inc., Cabot Cheese, and Commonwealth Dairy make high value, high margin ice cream, cheese and yogurt products, and the same can also be said of Vermont organic milk and dairy products, and the niche farmstead products.  The differentiated segment that includes these products is both very profitable and expanding in sales, in marked contrast to the remainder of the commodity manufactured dairy products sector, and indeed in contrast to the performance of the overall dairy industry, as a whole.  

This new multi-sector reconfiguration of the Vermont dairy industry should thus present dynamic market opportunity for all industry participants.  The industry uniquely combines high-valued dairy product offerings, brand strength, prime geographic location, and capacity for growth and expansion.  

This high-value, high-margin industry positioning thereby may, and should, also provide strong potential for restoration and renewal of the long-term sustainability of the Vermont dairy farms that provide the critical raw milk supply, and also for significant improvement across their farming operations.  

The second transforming change that has occurred with the multi-sector reconfiguration of the Vermont dairy industry is the re-establishment of the State’s comprehensive regulatory oversight of the Vermont dairy marketplace.  The new in-state utilization of in-state milk production equates legally to an in-state transaction between purchaser and seller, which establishes state regulatory jurisdiction and control over that transaction.

This is a most dramatic legal change.  Before, when the industry was dominated by the single-sector production of raw milk, Vermont was unable to exercise legal control over the purchase pricing by out-of-state companies, stymied by operation of the Interstate Commerce Clause.  This meant that the farms’ need for, and public interest in, adequate and sustainable pricing was solely dependent on remote federal regulatory oversight.  

Based on the new in-state legal authority, the State is no longer dependent on the exercise of remote, and now ineffectual, federal regulatory authority.  Rather, the State has the regulatory power to address the core financial pricing distress that now confronts Vermont dairy farmers when selling their milk product. The price paid for the substantial volume of milk sold and purchased in-state, along with price fluctuation, is now subject to direct state regulation.  In addition, the amount of that supply and the production practices employed to produce that volume of milk are also now subject to direct state regulation.

Summary Conclusions

We conclude that the national market and regulatory pattern beyond the Vermont marketplace, which has tied Vermont raw milk pricing to unsustainable, inadequate and volatile, commodity dairy pricing, is not likely to be altered, and is in fact more likely to accelerate.  

We further conclude, therefore, that Vermont must plot its own, new and BOLD, State-based course if there is to be a sustainable future for the Vermont’s dairy industry and the working landscape it supports. 

We also conclude that the multi-sector reconfiguration of the Vermont dairy industry presents a realizable opportunity for Vermont to so plot its own course and to overcome the destructive national market and regulatory pattern.  With BOLD State action that first harnesses the State’s revitalized regulatory power and then implements a combined program of innovative regulation and economic development, the industry’s unique and dynamic market positioning can be fully unleased so as restore a vibrant future that is consistent with its storied past.  

We also conclude that this opportunity includes the potential for sustainable operation of Vermont dairy farms of all sizes, along with growing sales of high valued Vermont milk and dairy products. This opportunity can also result in resolution of problematic farm-based water pollution and farming practices caused by distressed farm operation, with reduced reliance on public funding.  

Finally, we conclude that the proposed cross-government task force is the best means to achieve these objectives.  The power to do what is needed already exists.  What is now required is bold leadership by our governmental leaders, to harness that power. 

Background of Report Authors 

Roger Allbee

627 Brookline Rd 

Townshend, VT 05353

roger.allbee@yahoo.com                                                                                    

Former Vt. Secretary of Agriculture; Former State Director of Vt. Farm Service Agency; Former VP and Member of Senior Management Team of Former Farm Credit Banks and Bank for Cooperatives for the Northeast; Served on the Professional Staff of the U.S. House Committee on Agriculture, former appointed member and former Chair of the USDA/USTR Animal and Animal Products Trade Advisory Committee to the U.S. Secretary of Agriculture and U.S. Trade Ambassador, Member of International Market Team of Washington D.C. law firm and participant as NGO in Seattle Round of Multinational Trade Negotiations, Past Chair of the Working Landscape Council of the Vermont Council on Rural Development.

Daniel Smith, Esq.

16 State Street

Montpelier, VT 05601

(802) 229-6661

dsmith@dairycompact.org

Founding Executive Director of the Northeast Dairy Compact Commission; former Legislative Counsel for Vermont House and Senate Agriculture Committees; legal practitioner in specialized field of state and federal milk market regulation; special counsel for state regulatory action in a number of states across the country.  

Market Manipulation: WHEN THE 1856 BUTTER MARKET IN ST. ALBANS WAS CORNERED FOR FINANCIAL GAIN AND THE SILVER MARKET OF THE 1970’s

A HISTORICAL PERSPECTIVE

The term “cornering the market” means obtaining sufficient control of a particular stock, commodity, or other asset in an attempt to manipulate the market price.  This has been tried a few times over the years. It happened just over one hundred and fifty years ago, in 1856 when St. Albans, Vermont was considered to be the butter capital of the world. In my generation, many of you may be familiar with the Hunt Brothers from Texas in the 1970’s attempting to control the price of silver.

According to records, the greatest growth in Vermont agriculture took place from 1850-1880, with 35,000 farms at the end of that period.  Butter making was the primary commercial agricultural product that dominated the State into the early 20^th Century.  With the advent of railcars with ice, St. Albans become one of the leading providers of butter to Boston, with trains leaving once every Tuesday of the week.  Butter was considered to be Vermont’s signature product of the 19^th Century.  St. Albans was a very active town on these days. “On Tuesday during the spring, summer, and fall, teams of horses with wagons full of butter and cheese would be hitched to every post on Main Street, and hotels and barns would be full.  Butter was King.”  Tuesday was considered to be market day, with up to 300 teams of horses with wagons coming from every direction.  Buyers of what was considered to be some of the best butter would also descend on the town on that day.

By the 1890s the Franklin County Creamery Association had the World’s largest butter factory, turning out 25,000 pounds of butter each day, and some 35 million pounds were being produced in the state each year.   During this period, Vermont butter won two international awards for its quality, one for 1^stplace at the Paris Exposition in 1890, and another at the Columbian Exposition in 1893.  By 1915, there were nearly 300 butter factories in the state. 

St. Albans continued to be the prominent butter production area in the world until the early 1900’s when the demand for fluid milk in the cities increased and Vermont lost its competitive price in the butter market.  

Having what was considered some of the best butter, and a demand for that butter in the Boson Market, set up the conditions at that time for attempts to control the market and thus increase the price to sellers.  One successful attempt by B. F. Rugg to do so took place in 1856. 

Rugg was the prominent dealer in butter in the County and in the State.  He developed a plan to control the supply of butter to the Boston Market.  It is said that he had the brains, energy, confidence, and contacts and financial resources to do so.  His scheme was to buy butter in the spring when prices were low and quietly store it in cellars.  He continued this practice in July and August sending only small supplies to the market each week to avoid detection.  He continued to buy and buy and hold product until the price was at a level where he could make a substantial profit. The demand in the Boston Market was so great that eventually they had to agree to his price.  The profit of Rugg’s adventure in controlling the supply that year amounted to a sum of $18,000, or about $531,670 in today’s dollar value.  It is said that he tried to repeat his scheme again the next year but for many reasons was not successful.

Manipulating the silver market in the 1970’s was much more complicated than cornering the butter market in St. Albans in 1856. According to the history of the time, the Hunt Brothers did not trust the U.S. Government or the reliance on the value of the US dollar. Like their Dad before them, the Texas brothers made their tremendous fortune in oil and were considered among the richest people in the world in the 1970’s. They believed that inflation would eat away at their tremendous wealth and the collapse of the dollar was inevitable.  The only alternative in their minds was to turn to tangible assets like gold and silver…they chose silver.  Determined to protect their wealth, it is said that they “erected one of the greatest bubbles in the history of financial markets”, pushing silver prices from six dollars an ounce in 1979 to just around fifty dollars an ounce in early January 1980, an increase of 713%. They owned $6.6 billion of silver at the top of the market. They saw silver as a safe haven for their tremendous oil fortune and invested very heavily into silver bars and silver future contracts, borrowing to do so, not depending on their cash or financial resources.   At the height of their leveraged investment, they controlled 69% of all silver futures traded on the Commodity Mercantile Exchange in New York, and 1/3 of all silver not held by the federal government.  It is said that they even chartered jets to fly their silver, under armed guard in the middle of the night, to Switzerland for safekeeping.  This financial position they had could not be held when the new Chairman of the Federal Reserve, Paul Volker, took actions to keep inflation under control by limiting speculative lending by banks.  In addition, the Commodity Exchanges took action to limit the investment in silver futures and also restricted the holding of silver.   On March 27^th, 1980, called “Silver Thursday”, the Hunt’s attempt to control the silver market came to an end with prices falling by one-half.  The Hunt Brothers could not make the $135 million margin call on the future contracts they had purchased at a higher price.  As a result of this failed attempt, the Hunt Brothers spent decades settling lawsuits, and in 1988 they filed the biggest personal bankruptcy in Texas history with Nelson Hunt agreeing to give up his prized collection of 500 horses.  It has been written “that this is a nice look at how a couple of extremely wealthy men got their asses handed to them by trying to manipulate the market.”

Summary:  While the actions to control the butter market for that one year in 1856 succeeded, the attempt by the Hunt Brothers to control the silver market in the 1970’s did not.  Of course, financial and commodity trading regulations over the period of time from 1856 to the 1970’s,  even to today, have dramatically changed.  Due to concerns and the possible impact of market manipulation activities, Congress has provided a number of federal agencies with enforcement powers to prevent manipulation of prices in the market.  These include the Securities and Exchange Commission (SEC), the Commodities Futures Trading Commission (CFTC), The Federal Energy Regulatory Commission (FERC), and the Federal Trade Commission (FTC).  The U.S. Department of Justice and the FTC have anti-trust authority.

Blogger Comments: While I was not schooled on the issues at the time, I had just been hired in 1979 by then Congressman Jim Jeffords of Vermont as his professional staff member on the US House Committee on Agriculture.  The House Committee on Agriculture has jurisdictional authority over the Federal Commodity Futures Trading Commission (CFTC) and due to this the Hunt Brother’s were asked to testify before the Committee.  I remember sitting as a staff member in the packed committee room listening as the two brothers tried to defend their silver scheme, the greatest attempt at the time to control a price of a commodity.  Unlike Mr. Rugg in St. Albans in 1856, they did not succeed.

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References for this blog:

·      “Butter is King”, by R.R. Sherman, Origin of St. Albans Butter Market in 1872, in Vermont Historical Society, Freedom and Unity, Industrialized Vermont, Cheese, Butter then Milk.

·      Life in 1864: Industry and Retail, September 3, 2014 in the St. Albans Raid, by Michelle Monroe, St. Albans Messenger Staff Writer

·      Heller: The Best Butter in the World, by Paul Heller, for the Weekend Magazine, The Rutland Herald, September 14, 2019

·      The Origin of the St. Albans Butter Market, A Paper read before the Vermont Board of Agriculture at its meeting at St. Albans, March 6 & 7, 1872, by Dr. R.R. Sherman of St. Albans

·      Origins and Progress of the St. Albans Butter Market, St. Albans Weekly Messenger, March 22, 1872

·      When Vermont was the butter and cheese capital, by Roger Allbee, in Vtdigger Commentary, August 26, 2018

·      Silver and Thursday: How Two Wealthy Traders Cornered the Market, in www.investopedia.com

·      Bunker Hunt: Attraction to Silver: A History of Cornering the Silver Market, in Silver Monthly, Tuesday Feb. 11, 2020

·      A Silver Tale or How the Hunt Brothers Lost It All, in Daily KOS, Tuesday Oct. 30, 2018

·      Hunt Brothers trying to corner silver market, in www.businessinsider.com, May 17, 2016

·      The Intersection of Market Manipulation Law and Monopolization Under the Sherman Act: Does It Make Economic Sense, by Ledgerwood, Keyte, Verlinda, & Ben-Ishai in Energy Bar Association, 4/23/19

THE MILKMAN DOESN’T STOP HERE ANYMORE

It has been said that the home delivery of milk started in rural Vermont around 1785. This was when wagons drawn by horses with cans of milk from nearby farms were used to deliver to customers. Whether it is true that it began in Vermont, it is clear that the home delivery of milk was a reality even up to the 1960’s in the state.   Those of us who grew up in the in the 1950’s and 60’s and before undoubtedly remember the milkman, and the delivery of milk to the home in glass bottles.   In my family’s case, we were able to get our raw milk in glass bottles each day from my grandfather’s small dairy farm next door. My mother would often take the cream off the top of the bottle where it settled for baking and making other things.  For others, who were not on a farm, the milkman came and left the glass bottles in a metal box on the steps near the front door. Some even placed the milk in the refrigerator in the home if they were a trusted figure.  The milkman was a fixture in America, described as a humble figure, circulating the city at all hours as the guardian of public peace and safety.

In the early history of home milk delivery, before the invention of glass bottles in the 1870’s, it is said that milk was often delivered in a sheep’s stomach, and later in metal cans. In one historical case (A Brief History of Home Milk Delivery by Robert Taylor) it is stated that for a period in the 1840’s, John O’Sullivan of Utica New York delighted customers with his Fresh From the Teat campaign, wherein the milk man would bring the cow to the customers’ doors and extract milk on the front lawn.  People loved the service, but the cows became prone to performance anxiety, workers complained about unfair working conditions, unionized, and eventually drove O'Sullivan out of business.  In the early 1900’s a large percentage of families kept a few cows to provide milk, and to make butter and cheese. Families who did not keep a cow, relied upon a neighbor for milk.  At that time most of home delivered milk was raw.  The interest in public health and milk quality, resulted in state laws and city ordinances that required that all milk be distributed in sealed containers and many ordinances also required that it be pasteurized. 

According to records, the home delivery of milk was a big business before the 1960’s. The U.S. Department of Agriculture data shows that the home delivery was a mainstay in the 1950’s with one-half of all milk was home delivered.  In 1963 29.7 percent of homes relied on this method of delivery but by 1975 it had dropped to only 6.9%, and by the 1990’s to less than 1 %.   The late Dr. Fred Webster, a Professor of Extension at the University of Vermont, stated in a Rutland Herald interview in 1996 “that when I came to UVM in 1956, there were 230 milk dealers in the state, and most did home deliveries.  Going back to 1920’s and 20’s, you could multiply that number by 10.”  In 1944, data indicates that 44% of Burlington and 45% of Essex Vermont residents relied on the milkman delivering their milk.  Several dairy farmers had a small home delivery route that served their community in the 1800’s and the early to mid 1900’s.  In the area of Southern Vermont where I grew up there were still several distributors of milk to the home in the 1950’s

So, what happened to cause the decline? The post-World War II period brought a boost in automobile ownership as well as the movement to the suburbs of the population.  Automobile ownership boomed after World War II. During the war years gasoline supplies were restricted and automobile production for public and commercial use ended in 1942 to be resumed after the war.   In Vermont and across the United States, people became more mobile after the war with greatly improved roads.  The 30’s and 40’s also saw the beginning growth of supermarkets where people could buy a number of items at one time, no longer being dependent on local specialty food shops.   These stores had large refrigeration units that could store items for longer periods of time and in larger units, and in volumes and pricing that made it economically difficult for the milkman to compete.  Milk could also be shipped longer distances and in much larger volumes.  Tanker trucks, that replaced milk trains, with improved highways could transport up to 7,000 to 8,000 gallons of milk at one time to a processing facility in or near the city where the milk could be packaged into coated paper cartons and polyethylene containers, replacing the glass bottle. Due to economies of scale in assembling and distributing milk, these specialized processors grew in size. Dairymen became more involved in the production of milk as they could not afford to expend the time and cost in distributing the product to the home. They could not compete with the supermarket.

Yes, a lot has changed in the delivery of milk and other food items today.  The horse drawn wagon of early years that went house to house has disappeared to be replaced by large supermarkets.  There has however been a re-emergence of the home delivery of food with on-line shopping. A 2017 study by the Food Marketing Institute and Nielsen, twenty-three percent of American households are now choosing and buying their groceries on-line.  In some places the Milkman is back too.  In several areas now across the U.S., there are companies delivering milk and other food products to the home.  While customers pay more, they are said to like the convenience, quality, and tradition of the Milkman of the past.  In Vermont today there still are family owned milk companies that started their businesses by delivering to the home that still exist doing delivery to stores. Glass bottles with local milk can be found in food cooperative stores in the state.  Raw milk like I and others grew up on can also be purchased by consumers directly at many dairy farms. The milkman does not exist in many places in Vermont today but the interest in convenience, quality and customer service still does.

                                                                 -30-

BLOGGER’S COMMENTS:

Today the home delivery of milk is a customer service that is missed by my generation and others.  In the 50’s and 60’s when you went to the grocery store, the clerk would offer to carry your grocery bag out to the car.  Likewise, when you went to the gas station, the attendant would put gasoline in the tank, and clean the windshield of the car.  Customer service was considered to be necessary, as the customer came first.  Consumerism and product delivery has changed since the 50’s and 60’s, but the growth of farmer’s markets, Community Supported Agriculture (CSA’s), Buy Local, and other venues has help to better connect consumers with products produced on or with the land in Vermont.  This has helped to re-establish the connection between the producer of the product and the customer today that existed with the milkman of the past.

Picture: Courtesy Dr. Neil Pelsue. 

An old carrier with bottles. From left to right:  George Thomas bottle of Brattleboro Vermont with Spoon for scooping cream from top; UVM Amber bottle; Kenolie Farm Bottle from Newfane; Bellows Falls Cooperative Creamery bottle, used exclusively for First National Stores.

RESOURCES FOR THIS ARTICLE:

• The Evolution of Milk Pricing and Government Intervention in Dairy Markets, by Eric M. Erba and Andrew M. Novokovic, Cornell Program on Dairy Markets and Policy, February 95
• A History of The American Milkman, by Caroline Lange, in Food Biz, September 9, 2017
• A Brief History of Home Milk Delivery, Stanpac
• A Brief History of Home Milk Delivery, by Roger Taylor, The Big Jewel, June 24, 2015
• The Day the Milkman Went Away: A History of Home Milk Delivery, in Drink Milk in Glass Bottles
• Remember the Milkman? In Some Places, He’s Back, by Eve Tahmincioglu, New York Times, Dec. 16, 2007
• The history of the milkman: Who killed him? Newsletter posted by pam kueber, June 3, 2009, in Mid Century Culture, Historic Preservation
• The Milkman’s Robot Helper, could futuristic technology have saved the milkman from extinction, by Matt Novak, SMITHSONIANMAG.COM, March 28, 2012
• The Milkman’s Comeback Means Dairy at The Door and More, by Bonny Wolf, NPR, Weekend Edition Sunday, June 15, 2014, 10:04 AM ET
• From farm to front porch: remembering the milkman, by Cathy Knapp, in IndyStar July 20, 2015
• April 8, 1879: The Milkman Cometh…With Glass Bottles, by Randy Alfred, April 2010, WIRED
• Neighborhood milkman offers nostalgic link to history as society evolves, by Dominic Cansdale, ABC News, 20 March 2019
• Return of the Milkman, by Denise Shoukas, Specialty Food Magazine, Specialty Food Association, Jan. 8, 2019
• The milkman no longer cometh: Utah’s Winder Farms to end home delivery, by Kathy Stephenson, The Salt Lake Tribune, June 21, 2019
• Reducing the Frequency of Home Delivery of Milk, by Homer Metzher and James H. Clarke, Bulletin Maine Agricultural and Forest Experiment Station, B637
• Baby Boomers Memories: Fresh Milk Came via Horse Drawn Wagon, by Jim Shuylman, Bennington Banner, Dec. 6, 2017
• A Milkman Tells the History of Elmwood Dairy, by Dean Palin of Derby, Vermont Northland Journal, Oct.  2016
• The Milkman and His Customer: A Cultivated Relationship, by Odis E. Bigus, a Post Doctorate Student in Sociology at University of California
• Every Other Day Milk Deliveries May be Continued, Burlington Free Press, Sept 6, 1945
• Creamery Brings Back Memories of the Milkman, by Margorie Stinchcombe, Burlington Free Press, April 28, 1998
• Memories of Local Delivery of Milk by Dr. Fred Webster, Rutland Herald, November 11, 1996
• The Evolution of Grocery Shopping, Etwentyne
• Drink Up: As milk consumption declines, Osceola dairy farm targets niche market, by Mary Shown, South Bend Tribune, January 16, 2020
• Rise ‘n Shine…It’s the milkman, WCAX, So. Burlington, Jan 9, 2020 (the milkman of Charlotte, Vt)

THE 1908 COUNTRY LIFE COMMISSION ENCOURAGED THE REVITALIZATION OF CHURCHES IN RURAL AMERICA

After the Civil War, the late 1800’s and early 1900’s was a period of unrest in American agriculture.  In 1893, historianFredrick Turner proclaimed the end of the American Frontier…as the trend toward urbanization was well underway. Some of the farm population was moving to the cities, farmers were losing some of their political clout, railroads and others were gaining political power, and there were growing risks and uncertainties for agriculture. More people lived in rural communities and on the farm, but this number was decreasing. America was being transformed from a rural agrarian society into an urban industrial one. The Patrons of Husbandry or the Grange, the first national farm organization, was formed during this period due to the grievances that existed at that time within the farm and rural population. The railroad monopoly had established an absolute tyranny over the farmers “unequalled in any monarchy of the Old World.” Even in Vermont there weregreat uncertainties with the loss of hill farms. Coming out of this period, President Teddy Roosevelt in 1908 appointed a Country Life Commission. The Commission had three objectives for the improvement of rural life: a national agricultural extension program, scientific surveys of rural life, and the establishment of a national agency devoted to rural progress. They as well as other progressives believed in the country life movement, that “even rural neighborhoods in the twentieth century had lost the sense of community characteristic of the nineteenth century.” Some believed that it was the decadence of country life that led to the fall of Rome.  They saw the decline of the rural population as ultimately affecting the welfare of the nation.

Many in the Country Life Movement had also identified the country church as a key institution in the reform of rural life. The country church had declined and needed to be revitalized. Undertaking studies of how these churches could best be revitalized came through work conducted by Charles Otis Gil, a Yale and Yale Divinity School as well as Union Theological Seminary graduate.  His early work in Vermont was as a Congressional minister in Harland, Vermont. Gil, along with Gifford Pinchot, also a Yale graduate, and a member of the Country Life Commission, authored two influential books on the state of rural churches in America with remedies for revitalization.  Pinchot had already distinguished himself as a leading conservationist and as the first Chief of the U.S. forest service.

The first book, The Country Church, published in 1913 was done by studying rural churches in two counties; one in Windsor County in Vermont, and the other Tompkins County New York, the home of Cornell University, and the home of Liberty Hyde Bailey of Cornell who had been Chair of the Country Life Commission.   It is said that the purpose of these studies and resulting books “was to help in getting the country church back into the position it ought to occupy as a great power working effectively for country life.”  Gill and Pinchot, as well as others in the Country Life Movement, had identified the country church as a key institution in the reform of rural life.  The Church, they recognized, had declined but needed to be revived or restored to its “old time” vitality by a new program of social service.  Thus, the country church was seen as a force for community improvement.  Pinchot as a member of the Country Life Commission, believed, along with Gil, that the country church could take a role in making rural life a success by organizing cooperative ventures in crop production, marketing, milling, banking, and purchasing of supplies. The church needed to re-establish itself as a leader in the community and farm life as it had been in the nineteenth century.

In 1913 with his distinct knowledge of country life and rural communities, it was no surprise then that Vermont Governor Fairbanks chose Charles Otis Gil as a delegate to the North American Commission.  This Commission, created by President Wilson in 1913, was established to further address rural and farmer concerns raised by the Country Life Commission and others at the time.  It consisted of representatives from many of the states plus four Canadian provinces, and was challenged and authorized “to investigate, and study in European Countries cooperatives, land-mortgage banks, cooperative rural credit unions, and similar organizations and institutions devoting their attention to the promotion of agricultural and the betterment of rural conditions( see 63rd Congress, 1st Session, Senate, Document No. 214). They undertook this mission in travels and meetings throughout Europe, Russia and Egypt in a three-month period from April to July 1913(the map of their study route is very interesting)

After his return as a member of the Commission, Gil joined Pinchot to continue their investigation of country churches andas a follow-up to their study of the two counties, one in Vermont and one in New York.  The conclusion of this earlier study led to the creation of the Commission on Church and Country Life.  It was decided to extend the study to an entire state, and Ohio was chosen.  The Study, Six Thousand Country Churches, by Gill and Pinchot, was published in 1919, and was considered one of the most thorough studies of country churches and their role in rural America at that time. In their findings, they state that “unless a larger and stronger social and religious institution is created in the country districts than is now found in the country church, the more vigorous young people will for the most part leave the country….”

Charles Otis Gill, an American Congregationalist clergyman, retired as a farmer to Westford, Vermont in 1929 after spending many years as a minister in several Vermont towns, and after having co-authored two influential books on the state of rural churches in the United States. Clifford Pinchot, the Co-Author of the two books, went on to serve two terms as Governor of Pennsylvania.  He was considered a leading conservationist at the time, and It is said that his leadership put conservation of forests high on America’s priority list

This period of unrest in the rural and farm community helped to usher in fundamental and lasting institutional changes in the United States. Congress created the federally authorized Agricultural Extension Service and also established the Federal Farm Credit Land Banks in 1916.

Blogger’s Reflections:  Fredrick Turner, a leading historian at the time indicated that the American Fortier had ended.  The information at the time contributed to that finding.  Beginning in the early 1800’s, the Erie Canal had contributed to the opening of the West (see blog posting: The Erie and Champlain Canal, Two Hundred Years of History and How It Transformed the Flow of Commerce by Opening the West).  During the 1800’s vast tracks of Western land were provided, forcing the native Americans onto reservations.  For Example, from 1850 to 1871, the railroads received more than 175 million acres, more than 1/10 of the whole U.S.  In addition, western homesteaders (Homestead Act of 1862) received more than 80 million acres of public land.  The Land Grant Act of 1862 provided 17.4 millionacres of public land for the creation of Land Grant Colleges (based upon 30,000 per the number of members of Congress from each state).  Vermont received scripts for the sale of 90,000 acres, valued at the time at about 90 cents per acre.  These programs opened up the West for settlement and contributed to the findings by Turner that the frontier had ended.

The mid to late 1800’s was also a time of increased national attention to education.  The Land Grant Act was the firstnational attention to higher education for the masses. (see blog posts: The Life and Times of U.S. Senator Justin Morrill, and also The Historical Importance of Agricultural Education).  The formation of the Land Grant in Vermont was not without controversy.  In the beginning it was proposed for example, that UVM, Middlebury, and Norwich be formed into one Land Grant institution.  Even the state legislature passed a law to allow that to happen.  It did not and UVM became the Land Grant, but not without further controversy when the Grange and others at the time in 1890 proposed that its status be taken away due to its lack of attention to agriculture within the state (see Vermont History, the Proceedings of the Vermont Historical Society, April 1958).  Other Land Grants with public funds created at the time in the East consisted of Dartmouth (ended with formation of UNH), Yale and Brown Universities. (these ended with UCONN, and URI being established as Land Grant Institutions in each state), and M.I.T. which received 1/3 of the public funds available to the State of Massachusetts under the Land Grant Act, with UMASS also a Land Grant in the State.  

In 1887, The Federal Hatch Act authorized the creation of agricultural experiment stations.  The Vermont General Assembly authorized one and it was established at the University of Vermont as a partnership between the state, USDA, and the Land Grant College for the purpose of “conducting research in field of agriculture with special reference to conditions in the State of Vermont.” (see blog posting: Brief History of Agriculture, The Environment, and Land Use in Vermont).

The 1900’s it can be argued was the beginning of a more activist or interventional period in American agriculture.  The creation of the Federal funded Agricultural Extension Service, and the beginning of the Federal Farm Credit Land Banks started this more direct service period to farmers and rural citizens in the United States in 1916.  A more activist period came after the Depression that resulted in the New Deal Programs of the 1930’s.

REFERENCES FOR THIS BLOG:

• Country Life Movement, Wikipedia

• Report of the Country Life Commission, 60th Congress, 2ndSession, Senate, Document No. 705

• Dairy Yonder, keep it Rural, Country Life Movement-Miles to Go, by Timothy Collins, June 24, 2009

• Agricultural History, Vol. 34, No 4, 1960, pp 155-172, Clayton S. Ellsworth, Theodore Roosevelt’s Country Life Commission, Agricultural History Society

• Conceiving the Future: Pronatalism, Reproduction, and the Family in the United States, 1890-1938, Laura L. Lovett, University of North Carolina Press, Nov 30, 2009

• Comps Notes: Frederick Jackson Turner’s “The Significance of the Frontier in American History”, posted by Jessica M. DEWITT on April 3, 2018

• The Country Church: The Decline of its Influence and the Reality, by Charles Otis Gill, Gifford Pinchot

• Six Thousand Country Churches, by Charles Otis Gill and Gifford Pinchot, The MACMILLAN COMPANY, NY, 1920

• The Church and the Rural Community, by Warren H. Wilson, American Journal of Sociology, Vol 16, No. 5(Mar. 1911), pp. 668-702, University of Chicago Press

• Charles Otis Gill, WIKIPEDIA

• Gifford Pinchot, WIKIPEDIA

• Rise of Industrial America, 1876-1900, Railroads in the Late 19th Century, Railroad Land Grants, Library of Congress

• Educator Resources, The Homestead Act of 1862

• Library of Congress, Immigration, Removing Native Americans from the Land, https://www.loc.gov

• See Vermont History, The Proceedings of the Vermont Historical Society, April 1958, that has chapter on the challenge by the Grange in 1890 to take the Land Grant status away from UVM.

• DocsTeach, from the National Archives: The Settlement of the American West

• The Chronicle of Higher Education, Commentary, Why theMorrill Land Grant Colleges Act Still Matters, by Christopher P. Loss, July 16, 2012

• Agricultural Experiment Station Act of 1887, WIKIPEDIA

• The National Academies Press, Collages of Agriculture at the Land Grant Universities: A Profile, History and Overview of the Land Grant College System

• Agricultural Cooperation and Rural Credit in Europe, American and United States Commissions, 1913, Senate Document No. 214, Parts I.II, III, 63rd Congress

• The Library of Congress, Web Guides, Primary Documents in American History, Morrill Act