Charlotte Smith; Farm-to-Consumer Legal Defense Fund (FTCLDF) board member; interviews Elizabeth Rich; FTCLDF Executive Director, acting President, attorney, and farmer; about the top ten herd share questions she received through her private Facebook group for farmers, “The Profitable Farm with Charlotte Smith.” This interview was originally published by 3 Cow Marketing and has been edited and reposted here with permission.
One conversation I had with attorney Elizabeth Rich about raw milk herd shares warrants sharing with you. I learned I don’t understand nearly as much as I thought I did. And I’m not the only one—they are darned confusing to most raw milk farmers!
Herd share laws/regulations/expectations can vary from state to state which makes it even more complicated.
Last week, I compiled all of your questions about raw milk herd shares, and Elizabeth and I reviewed them. One thing I know for sure—there is a gray area around herd shares. It’s not black and white, so be sure to do your homework.
This blog post is informational only and is not intended to provide legal advice. If you have questions about the law applicable to you and your farm, you should consult with a licensed attorney. FTCLDF members: you are welcome to contact FTCLDF concerning herd share laws that apply to your farm.
What is a herd share?
A herd share, also known as a farm share, cow share, goat share, etc., is where people buy shares of a milking animal or herd, and pay the farmer to care for the animals and milk them. As owners, the shareholders are entitled to the milk from their animals.
(Note: you’re not selling milk to customers; instead they are receiving milk from their own cow.)
Full disclosure: herd share laws vary state-by-state so it’s imperative you know the laws. If you’re looking for a comprehensive guide to the raw milk laws in your state, visit the Farm-to-Consumer Legal Defense Fund’s interactive map.
Robin, Sarah & Amanda all asked: Does having a herd share agreement in place give the person entering into the contract the right to the milk and any dairy products from that cow, such as yogurt, kefir, butter, cream?
Not necessarily; this is a gray area.
Attorney Elizabeth Rich of the Farm-to-Consumer Legal Defense Fund says the organization has taken the position that a herd share gives you the right to other value-added products, but it does vary from state to state. So for instance in Michigan, FTCLDF won a case where the herd share was providing cream and butter to members of the herd share.
But each state has a unique set of regulations that you’ve got to be aware of. Generally, the states require that you have a dairy plant license to make those value-added products.
And, if you’re making these value-added products legally in your state and you have a herd share in place, make sure you don’t put a price tag on them because then you’re entering into retail sales of the product.
Also, don’t just hire someone to make your value-added products and then get into trouble for operating a dairy plant without a license.
Bottom Line: It is not guaranteed that you have the right to include other dairy products beyond fluid raw milk in a herd share. Members can consult with the Farm-to-Consumer Legal Defense Fund for more detailed information regarding laws in their state.
P.S. Make sure you’re producing safe raw milk with my free checklist: 6 Steps to Produce Safe Raw Milk
Daina asked: If you work with FTCLDF to create your herd share agreement, does the contract include herd health protocols?
Elizabeth reminded me that they are lawyers helping you create a legal document; they are not dairy managers, so they do not include herd health protocols as that’s not their area of expertise.
However, the organization can recommend to their clients a herd health consultant who can work with you to develop a set of herd health protocols for your farm.
Bottom Line: While not strictly necessary, this set of health protocols is a great document to give to your herd share members so they can feel confident in your herd health practices.
(Personally, I keep mine posted online so anyone can view my herd health protocols.)
Jess in Utah was recently sent a cease and desist letter by the Department of Agriculture because they had four cows and three goats, unaware of a new bill which says if you’re selling raw milk you are limited to two cows OR ten goats OR ten sheep effective June 1. They are wondering how to fight this.
Elizabeth points out that the law is the law. If you’re not complying, they have the right to give you a cease and desist.
She also encouraged Jess to research the law further—such as, are you limited to two cows per family, per individual, or is it related to property size? Or, can two farms be set up in one place, where one boards at the other one? It’s essential to read the law and understand the meaning of it.
Elizabeth’s legal experience with farmers indicates it’s often best to comply with the law because it’s not worth the stress and the money to try to change a law.
But she also pointed out that we often have more power than we think to influence the law if we believe it’s unfair or illogical.
Remember, most people in the legislature are not farmers, and they don’t understand the practicalities of farmers. They’ll listen to you if you are a voter, so round up a crowd. What the FTCLDF has found from their lobbyists is the tipping point is about 20 voters.
So round up 20 voters and contact your local legislators’ offices and work to get the law changed. Have your voice heard because they do care about farmers. Invite them out to coffee and say things such as, “I’m a small business owner and look how many farmers closed up in Utah last year due to this impractical law.” Yes, it takes initiative but you can do it! You can attend town hall meetings or reach out to individual legislators’ offices and share your concern.
Explain how losing farmers will adversely impact the environment or the community and that perhaps four (or ten, or unlimited) cows instead of two is far more practical because then it’s a sustainable model and we will see more farmers prosper.
Bottom Line: The law is the law and it’s up to you to know the laws in your state. However, don’t let that stop you from getting involved in your local government and getting your community involved if the laws seem unfair.
Can I just copy a friend’s herd share and customize it to my farm?
Elizabeth cringed when I brought this up! She stated it is absolutely, positively a bad idea to take an agreement that one of your farmer friends has or something you find on the internet. That will cause you trouble because it’s not customized to your farm, your situation, your state’s laws and regulations. It’s not intended to protect you; it was designed to protect the farm it was created for.
Elizabeth emphasized how important it is to pay your $125 to become a farmer member of FTCLDF (Charlotte’s experience: cheapest/best investment ever!) and let their attorneys consult with you one-on-one to customize a herd share agreement for your farm.
Bottom Line: Herd share agreements are not just a fill-in-the-blank form. Each one is tailored to the individual operation of the farmer that they’re representing in the state that that farmer is operating in. They change from farm to farm, state to state.
Crystal is in Nebraska where she can do legal on-farm sales but wonders if there are benefits to her switching to the herd share structure instead of just direct sales.
Crystal goes on to say, “We cannot do delivery and would be interested in the legalities of delivery for a herd share. I like the idea of having someone who is a guaranteed customer all year, as well as potentially paying some upfront costs, like for a CSA.”
(If Crystal could deliver, then hopefully that convenience would mean more people would take her milk every week if it showed up on their doorstep, making her farm more financially viable.)
Elizabeth said that in other states, such as Texas, they’ve worked with farmers to set up an agency agreement. That is where the herd share designates an individual as its agent for delivery.
In Texas, until recently, an agency agreement was deemed acceptable to allow delivery. Even though Texas only allows on-farm sales, they were willing to accept a written agency agreement, but now that’s changed with an administration change, and they are not so flexible.
Elizabeth makes an important point here that what’s deemed acceptable in your state can change from year to year. Therefore, you’ve got to keep up with those changes.
And here’s where my eyes were really opened because I (Charlotte) thought that a herd share agreement made delivery okay and you couldn’t be stopped. But I’m wrong! And this varies from state to state.
Bottom Line: Get familiar with the herd share laws in your state to determine whether or not it’s even legal for you to deliver raw milk, whether you’re set up as a herd share or not.
Not really a question, but an interesting discussion. One farmer mentioned that since California does not recognize herd shares, their farm is set up as a food co-op.
Elizabeth perked up at the mention of a food co-op and not necessarily in a positive way. She stated a real co-op is a complex legal entity. To set it up, you need a board of directors, and it must be managed.
It’s an entity under state law with stringent rules about how you manage the money. Those people are actual, live owners of the business—you can’t get around this. All of your profits need to be redistributed to those members through a patronage rebate at the end of the year. It’s a complex calculation, and I don’t know many farmers that can do it successfully.
Bottom Line: Many farmers think a co-op is an option because the name sounds like it’s a bunch of people cooperating and working together for the good of the farm. But if you’re not doing it correctly and legally, you’re creating all kinds of risk. If you are doing it correctly, it’s an incredible headache that is just not necessary. And at the end of the day, you don’t have a profit—that all goes to the members.
Dusty asks, “We thought we tested our cows for everything; now we find that Q fever has started in cows in the U.S. How responsible are we for any illness that comes up due to an organism we’re unaware of, such as Q fever?”
Elizabeth was very clear on the answer to this one. She states, “If you’re providing food from an animal and you’re collecting money for that food, then you’re 100% responsible. It’s not like a car accident where you have comparative negligence. Well, you ran the red light, but you were speeding. In this case ignorance is no excuse; you are 100% responsible. You’re putting a food product out there, and you’re responsible.”
Bottom Line: You’re responsible if someone gets sick from your milk, so stay up-to-date on the latest herd health protocols. Build a relationship with your local dairy vet and dairy consultants to support you.
Sarah asks, “I’m in Virginia. There are no laws against herd shares, but the inspectors keep telling everyone that they are illegal. It needs to be a goat or cow share for one animal, and the shareholders can only have the milk from their animal.”
Elizabeth states that in Virginia there are two Supreme Court cases that flat out say it’s illegal to have a raw milk herd share. So even though there are no laws against it, these cases give precedence.
Bottom Line: Know your state’s laws—check in with your local Department of Agriculture, FTCLDF, etc.
Amanda and Laura had similar questions as they live in states that allow herd shares and they both border states that don’t. They ask, “Would people be able to purchase a share from me and cross state lines to pick up and transport their milk?”
And good news: Elizabeth says if you own part of a herd share then you can definitely transport your milk across state lines. You would not necessarily be able to have someone else transport it for you though, so be mindful of that.
Bottom Line: Make sure you know the laws for raw milk in your state and border states. (Plus, it doesn’t hurt to be a member of FTCLDF so you can get a lawyer involved if necessary!)
Laura asks: “We can have a pet milk license or herd share agreements here in Tennessee. I’m unclear which is the better option for milk sales.”
I LOVE when there’s a clear answer to these questions: Elizabeth states that for Laura, a herd share is going to be a lot less complicated; it doesn’t require annual renewals, it doesn’t require agency inspections, and it doesn’t require lying.
Bottom Line: A herd share will have a lot less hassle and stress than trying to get licensed to sell pet milk.
Know Your State’s Legal Limits
As raw milk producers, let’s all strive to stay legal (and stay in business!) by knowing our legal limits in our states.
Thank you to Elizabeth Rich for answering these questions for all of us!
Also, she wanted to make one last recommendation that if you had FTCLDF do a herd share agreement more than two years ago, call them back and run it past them again. Laws change and positions change, and you want to make sure you’re protected. Think of it as a will—you need to check in and update it every so often to make sure it’s current.
If you’re looking for legal protection with an organization that actually understands the struggles you face as a farmer, then I highly recommend becoming a member of the Farm-to-Consumer Legal Defense Fund. It’s the best $125 I spend every year as a raw dairy farmer!
Please be advised, this post is informational only and is not intended to provide legal advice. If you have questions about the law applicable to you and your farm, you should consult with a licensed attorney.
To learn more, visit www.farmtoconsumer.org/farmer-membership
YOUR FUND AT WORK
Services provided by FTCLDF go beyond legal representation for members in court cases.
Educational and policy work also provide an avenue for FTCLDF to build grassroots activism to create the most favorable regulatory climate possible. In addition to advising on bill language, FTCLDF supports favorable legislation via action alerts, social media outreach, and the online petition service.
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