Oakhurst Dairy has made a tentative offer to buy the now-defunct MOO Milk, in a deal that would put the Maine-based organic milk brand back in stores.
However, farmers who formed the Maine’s Own Organic Milk collaborative said Oakhurst’s offer contains provisions that could make it difficult to accept.
The crux of their decision will be whether to stick together and go with Portland-based Oakhurst or to individually seek out other offers that might leave some of the 12 farms without a long-term buyer, said Laura Chase, co-owner of Chase’s Organic Dairy Farm in Mapleton.
“There is a desire to remain as a group and to stand together so that no farm is left without an option,” Chase said. “No one wants to make a decision that would put another farmer’s ability to farm in jeopardy.”
One condition of Oakhurst’s proposal is that at least 90 percent of the farms must accept it, she said. That means no more than one farm could opt out.
Spencer Aitel, co-owner of Two Loons Farm in South China, described Oakhurst’s offer as “weak,” because it doesn’t contain enough long-term guarantees to protect the farmers.
“It doesn’t seem like it’s the right deal for us, either individually or as a group,” he said.
The farmers participated in a conference call Thursday in which details of Oakhurst’s offer were explained to them, Aitel said. They got nothing in writing, and MOO Milk executives made it clear that the offer is tentative.
“At the end of the offer, they (said) it was pending due diligence,” he said.
A call to Oakhurst Dairy late Thursday afternoon was not returned.
The farmers were reluctant to discuss specifics of the verbal offer, but Chase said Oakhurst’s proposed price is lower than they had hoped. “It seems like they want the brand without paying much for the brand,” she said.
Chase described the farmers’ reactions during the conference call as less than enthusiastic.
Aitel noted that the farmers have other options, such as going with Organic Valley, a Wisconsin-based dairy provider that operates in Maine. However, he said it’s unclear whether Organic Valley will extend an offer to farms in more remote areas of Maine, such as Washington County.
Since MOO Milk discontinued direct-to-consumer sales in mid-May, the farmers have been operating under a temporary agreement to wholesale their milk to Londonderry, New Hampshire-based Stonyfield Farm, which makes yogurt. That agreement is due to expire when the farmers obtain long-term supplier deals, a Stonyfield official said.
Stonyfield Farm initially considered offering long-term supplier agreements to the farmers, company Chairman Gary Hirshberg has said, but it backed off when it learned that Organic Valley, one of its suppliers, was interested.
Still, Chase said, if only some of the 12 farms go with Organic Valley, Stonyfield Farm could make offers to the remaining farms.
The farmers said they plan to discuss Oakhurst’s offer among themselves this weekend, then speak one-on-one with MOO Milk Chief Operating Officer Robert Sessums on Sunday.
Chase said, “I don’t know if there is a deadline from Oakhurst (to accept or reject its offer), but MOO is running at a loss right now (wholesaling milk to Stonyfield Farm), so time is of the essence.”