Once he had the chores at his farm in Minot under control, Rick Hemond spent Friday morning calling other farmers who sell milk to Oakhurst Dairy.
As a member of Oakhurst’s advisory board, he wanted them to hear the news from another Oakhurst producer that the business had been sold. And he wanted to offer assurances that the buyer, Dairy Farms of America, had promised to keep doing business as usual and that the Bennett family would remain in charge.
“It’s just going to be different owners,” he was heard telling a farmer while a reporter waited on another line.
But no one would blame a farmer who sells his or her product to Oakhurst – there are about 70 around the state – for being nervous about the change. In recent years, dairy farming in Maine has been rocked by changes in state and federal subsidies, and the economy as a whole.
Producers who sell to Oakhurst pay the cost of trucking milk to the plant in Portland; every spike in the cost of oil affects their slim profit margins, as does the cost of feed.
Dairy farmers are selling off or cutting back their herds. In 2000, Maine had 500 dairy farms. In March 2013 there were 307, and by December the Maine Milk Commission was reporting there were 287 dairy farms. By winter’s end, more will likely be gone.
One reliable factor in a tough business has been Oakhurst Dairy: Maine-owned and operated for 93 years, producing quality products to be proud of and paying the best prices it could.
“The thing that bothers me is that Oakhurst has been a competitive market,” said Dale Cole, who owns Cole Farm Dairy in Scarborough and is president of the Maine Dairy Industry Association. “If you keep narrowing the markets down, you don’t have competition. I’d be lying if I didn’t say that is worrisome to me.”
In 2012, Oakhurst named John and Sandy Nutting’s dairy farm in Leeds, Androscoggin Holsteins, one of its top five producers. Not for quantity, but quality, which Oakhurst has been known for rewarding more than other companies. The company has given bonuses to farmers who keep clean cows, barns and equipment, and deliver high-quality milk with low bacteria counts and potential for good shelf life.
“You could get an extra 48 cents per 100 pounds of milk through Oakhurst,” said John Nutting. A “hundredweight” of milk is 11.6 gallons.
After 44 years on the farm, the Nuttings sold their cows last year and put their place on the market. Nutting said he worries that Oakhurst’s high standards as a family business might not be met by Dairy Farms of America.
“My initial fear would be for the Maine farmer,” Nutting said. “I don’t believe DFA premiums for quality will be as good as Oakhurst’s. With an organization with a national type of focus, usually – not always – the individual quality premiums aren’t as strong as those offered by the local dairies.”
He noted that Dairy Farms of America was the subject of a class-action lawsuit in 2007 by a group of dairy farmers who accused the company of suppressing milk prices in the Southeast. (It settled that lawsuit for $158.6 million in January of 2013.)
Nutting pointed to ways in which Oakhurst has also been good for Maine, running its trucks on alternative fuels, refusing to use milk from cows injected with artificial growth hormones, and standing up to Monsanto over the issue of labeling its milk as such.
“A lot of consumers are supporting Oakhurst for their pledge on synthetic hormones,” Nutting said. “Is DFA going to continue that?”
Yes, says Oakhurst Chairman Bill Bennett. “Having milk with no artificial growth hormone is important to our consumers so we remain committed to our pledge and will continue to pay our farmers to do so.”
Julie-Marie Bickford, executive director of the Maine Dairy Industry Association, said consolidation in the past 10 years has been challenging for Maine’s dairies, and for Oakhurst. She’s cautiously optimistic about the company’s future. “The devil is in the details,” she said.
Jerry Dryer, editor of Dairy & Food Market Analyst, said Oakhurst and Dairy Farms of America may make a “good marriage.”
“There aren’t too many small dairies left,” Dryer said. “They often need more resources. It’s very expensive to run a company. DFA brings some resources to the table, and some national reach.”
In Minot, Hemond echoed that sentiment. His farm, R.E. Hemond Inc., begun in 1945 by his father, bottled milk under its own label until the family sold the dairy business to the much bigger Oakhurst in 1988. Hemond has trucked milk to Oakhurst’s Portland plant since.
“I think it’s all for the better,” Hemond said. “Deep down, I knew something was going to be happening, because of the stiff competition. Even as big as Oakhurst is, I don’t believe they can compete with these big companies.”
And he’s looking for the bright side.
“They told us to increase production if we could because they are going to be needing a lot more milk,” Hemond said. “I don’t know if they are going to be packaging for someone else, but they’re telling us that it is exciting news for the farmers, that there is a market for Maine milk outside the state.”
Jean McKeen, who runs Silver Maple Farms in Albion with her son Dennis, has sold about 28,000 pounds of milk to Oakhurst every other day. If, as promised, the sale changes nothing, she’ll be pleased. But after 40 years in the business, she’s learned to roll with what comes her way.
“I guess we’ve got to believe them and wait and see,” she said.
Staff Writer Jessica Hall contributed to this report.
Mary Pols can be contacted at 791-6456 or at: