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Wisconsin - How DATCP Denies Raw Milk Consumers Their Rights

By Pete Kennedy, Esq.

Wisconsin is at the center of a growing battle over freedom of food choice and the right to have access to raw milk.  In the past five months, the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) has issued orders to three farms (Zinniker Farm Inc. in Elkhorn, Trautman Family Farm in Stoughton, and the Siegmann farm in Rubicon), prohibiting them from selling raw milk; if any of the farms is found selling raw milk, that farm can be charged with contempt.  In addition, DATCP has officially begun investigations of three other dairy farms (including Midvalleyvu Farms in Arkansaw), requesting records from the farms going back many years including contact information for anyone who has contracted to receive products from the farms.  Another investigation into a food buyers club (Belle’s Lunchbox operated by Max Kane) suspected of distributing raw milk and raw milk products has been ongoing for over a year now.

In a letter to the agency, FTCLDF General Counsel Gary Cox asked whether people would be in compliance with the law if they had absolute ownership of a herd of cows, boarded their herd at a dairy farm, paid the farmer to board and care for the cows and consumed all of the milk themselves?  DATCP’s response was that such an arrangement would be a sham and illegal under the state dairy code.

There is a general prohibition against the sale of raw milk in Wisconsin [1], with there being several exemptions to the prohibition [2].  One exemption allows for individuals who have a “bona fide ownership interest” in a Grade A dairy to purchase raw milk from the dairy [2].  Another exemption allows for the “incidental sale” of raw milk [2].  What constitutes a “bona fide ownership interest” and an “incidental sale” as well as the extent of the agency’s jurisdiction are currently under dispute.  One thing everyone agrees on, however, is that there is a legal right in Wisconsin to consume raw milk;  unfortunately, DATCP is doing whatever it can to make this right meaningless.  There are several ways a consumer should be able to obtain raw milk legally, but the agency is doing its best to shut them off.

DATCP has broad power under state law to regulate dairy farms; the agency claims jurisdiction over both licensed and unlicensed dairies.  Under state law, unlicensed dairies are classified as Grade B dairies [3], with this designation also applying to licensed dairies producing milk to be made into butter and cheese.  It was not the legislature that classified unlicensed dairies as Grade B, but rather DATCP through regulation. 

DATCP’s position is that if a dairy is unlicensed, milk produced at the dairy cannot leave the farm.  This is in conflict with other Wisconsin law that recognizes the right of owners of dairy animals to board those animals on someone else’s property.  The agency does not regulate those owning and boarding their own dairy animals to consume raw milk produced by those animals; however, DATCP is claiming that it is illegal for someone who owns a cow and boards the cow on another’s property to obtain raw milk from the cow.  This is the agency’s position whether or not the dairy boarding the cow is licensed.

In a letter to the agency, FTCLDF General Counsel Gary Cox asked whether people would be in compliance with the law if they had absolute ownership of a herd of cows, boarded their herd at a dairy farm, paid the farmer to board and care for the cows and consumed all of the milk themselves?  DATCP’s response was that such an arrangement would be a sham and illegal under the state dairy code [4]. Despite Wisconsin law recognizing the legality of boarding contracts, it appears that those boarding their cows on another’s premises would be forced to either dump all the milk produced or let the boarder’s family have it and then show up as guests to drink it.   They can only drink the milk as guests if the boarder has a Grade A permit, otherwise the boarder would have to sell the owners the milk from their own cows; and the boarder could only sell milk to the owners on an incidental basis [see below for DATCP’s interpretation of “incidental sale”].

In 2008 DATCP issued a new rule clarifying the exemptions to the prohibition on the sale of raw milk [2].  In issuing the rule the agency stated that the new regulation was to be interpreted consistently with administrative law decisions.  In 2002 and 2004, decisions by administrative law judge Cheryl Daniels (who is now assistant legal counsel for DATCP) established that those who invested in an entity such as a corporation or limited liability company that operated a dairy and held a Grade A permit could legally obtain raw milk and raw milk products from that dairy.  Grade A dairies wanting to sell shares could obtain orders from the Wisconsin Department of Financial Institutions (DFI) that would exempt them from the state’s securities registration requirements.  Seven farms received an Order of Exemption from DFI that expired after two years at which time the farm could apply for a new exemption.  DATCP approved every one of the exemptions.  Over two thousand people purchased shares in the farms.

There is an agency document entitled, Policy Guideline 4500, which covers the incidental sale exemption.  According to the guideline, repeat sales to a member of the public do not qualify as incidental; in other words, there is a violation of the law if a consumer purchases raw milk twice from a farm. 

In 2006, DFI issued the last of the exemptions; a number of the exemptions expired around the time that the new regulation on raw milk went into effect (February 2008).  The rule provided that an individual who had a “bona fide ownership interest” in a Grade A dairy could obtain raw milk from the dairy if it was “a legal entity other than an individual or married couple” [2].  No dairy that had held an Order of Exemption protested the new rule; it appeared that now the farms would be able to continue selling raw dairy to their investors without needing an Order of Exemption from DFI.  In 2009 DATCP changed its interpretation of the administrative law decisions; where the agency had once approved of stock offerings by the dairies at share prices that were affordable for any family to aquire a “bona fide ownership interest” in a dairy, DATCP is now claiming that “genuine ownership in the operation” is limited to “only those who are in the business of producing milk for grade A, either in fluid milk or milk products…” [5] and that such owners may “only incidentally” [5] take raw milk for their own use (for themselves, family and household guests) or allow employees to do so.  Nothing in the administrative law decisions mentioned this as a criteria for a legitimate investment.

One shareholder dairy has received an order from DATCP prohibiting the sale of raw milk; a second is under investigation, having received a request for business records going back eight years.  A third dairy (Grassway Organics in New Holstein) is suing DATCP to uphold the legality of the shareholder exemption [6].  DFI’s exemptions once meant increased business for all the shareholder dairies; now DATCP’s intent is to shut down their raw milk operations one at a time, leaving increasing numbers of consumers without a source. 

The most common way Wisconsin consumers legal obtain raw milk is through the “incidental sale” exemption.  Under state statute, the “incidental sale” of raw milk directly to consumers at the dairy farm where the milk is produced is not prohibited.  The 2008 rule issued by DATCP provides “a sale is not incidental if it is made in the regular course of business…” [2].  It would appear that under this interpretation a consumer would be able to establish a customer relationship with a farm that the consumer favored as long as the raw milk was not purchased on a regular basis; but DATCP has a more restrictive interpretation of “incidental sale” of which the general public is not aware.  There is an agency document entitled, Policy Guideline 4500, which covers the incidental sale exemption [7].  According to the guideline, repeat sales to a member of the public do not qualify as incidental [7]; in other words, there is a violation of the law if a consumer purchases raw milk twice from a farm.  An attorney for the DATCP has confirmed that this is the agency’s interpretation for the word “incidental”; there is no reason to doubt that DATCP will take action to uphold what it believes is the law if it has evidence that a farm is making repeat sales to a customer.  Last fall DATCP sent ‘cease and desist’ letters to dairy farms it suspected were selling raw milk in the regular course of business, with the letters going to farms that had as few as four cows.

In the recently decided Michael Schmidt case in Ontario, Canada, the judge ruled that Schmidt’s herdshare operation was in compliance with the law [8].  Ontario has even broader laws prohibiting the sale of raw milk than Wisconsin; the province bans any distribution of raw milk.  In ruling for Schmidt, the judge held that the herdshare was a private arrangement not subject to government regulation and that informed consumers had the right to waive the protection of the public health laws [8].  Similar wisdom is needed in Wisconsin.  DATCP is not protecting the public health in its enforcement actions against raw milk producers; it is interfering with the rights of consumers to do what they believe is best for their health and the health of their families.  Moreover, in addition to working to effectively deny consumers their right to drink raw milk, DATCP is demanding customer/shareholder lists from farmers the agency suspects of selling raw milk–a violation of the privacy of people who have done no wrong.

A bill that will legalize the sale of raw milk and raw milk products [9] has been introduced in both the Wisconsin General Assembly (AB 628) and the Senate (SB 434); hearings on the bill have been set:

  • Hearing on SB 434 is scheduled to take place before the Agriculture Committee in Eau Claire on March 10;
  • Hearing on AB 628 will be before the Rural Affairs Committee on March 16.

Wisconsin residents are encouraged to attend the hearings in droves.  A huge turnout is critical to the bill’s success.  The freedom of food choice is at stake.

References:

1.  Wisconsin Statutes - Chapter 97 (Food Regulation), Section 4: 97.24 Milk and milk products.

2.  Wisconsin Administrative Code - Agriculture, Trade & Consumer Protection Chapter ATCP 60 (Dairy Farms), Subchapter IV (Milk Quality Standards; Examination of Milk from Dairy Farms):  ATCP 60.235 Raw milk sales prohibited, exemptions.

3.  Wisconsin Administrative Code - Agriculture, Trade & Consumer Protection Chapter ATCP 48 (Drainage Districts), Chapter ATCP 60 (Dairy Farms), Subchapter I (Definitions):  ATCP 60.1 Definitions.

4.  Letter from Cheryl Furstace Daniels dated 1 October 2009, “re: September 30 Letter sent by Attorney David G. Cox” about Zinniker Farm, Inc.

5.  Letter from Cheryl Furstace Daniels dated 20 July 2009 to Attorney Peter D. Kennedy about Grassway Organics Farm Store LLC

6.  Complaint for Declaratory Judgment filed December 2009 by FTCLDF, Grassway Organics Farm Store LLC et al. against Wisconsin DATCP Secretary Nilsestuen

7.  Wisconsin DATCP Food Division, Policy Guideline - 4500 (5 June 1985), “Re: Incidental Sales of Milk and Cream“, p. 167

8.  “Regina v. Michael Schmidt Reasons for Judgment“ rendered 21 January 2010 by Judge Kowarsky of the Ontario Court of Justice Provincial Offenses Court (Newmarket) in the Michael Schmidt raw milk case in Canada.

9.  Wisconsin raw milk bill as introduced in the Assembly on 18 December 2009 (LRB-3961/1) as AB 628 and as introduced in the Senate on 21 December 2009 (LRB-3242/3) as SB 434

For status of AB 628, go to http://www.legis.state.wi.us/2009/data/AB628hst.html

For status of SB 434, go to http://www.legis.state.wi.us/2009/data/SB434hst.html

 


 

97.24 Milk and milk products

Below is an excerpt of the general prohibition on the sale of raw milk but with exemptions.  Click on link above to view entire section. File: WI_Statute–97.24_Milk_and_milk_products

97.24 Milk and milk products
. . .

(2) Requirements for milk and fluid milk products; grade A requirement.

(a) No person may sell or distribute any milk unless that milk is
produced, processed and distributed in compliance with standards established by the department by rule under this chapter.

(b) No person may sell or distribute any milk or fluid milk products which are not grade A milk or grade A milk products to consumers, or to any restaurant, institution or retailer for consumption or resale to consumers. Grade A milk and grade A milk products shall be effectively pasteurized, and shall be produced, processed and distributed in compliance with standards established by the department by rule under this chapter.

(c) No person may sell or distribute milk or fluid milk products which are labeled or otherwise represented as grade A milk or grade A milk products unless the milk and fluid milk products comply with this chapter and with standards established by the department by rule under this chapter.

(d) This section does not prohibit:

1. The sale of milk or fluid milk products which are heat sterilized in hermetically sealed containers.

2. Incidental sales of milk directly to consumers at the dairy farm where the milk is produced.

3. Incidental sales of pasteurized milk at a dairy plant licensed
under s. 97.20.

4. The sale of grade A milk or grade A milk products which are
produced and processed under equivalent laws or rules of another state or a local governmental unit, as provided under sub. (4) (b).



ATCP 60.234 Raw milk sales prohibited, exemptions

Wisconsin regulations delineate the exemptions to the prohibition on the sale of raw as excerpted below. Click link above for entire section.

ATCP 60.235 Raw milk ales prohibited; exemptions.

No person may sell or distribute unpasteurized milk or fluid milk
products to consumers, or to any person for resale or redistribution in unpasteurized form to consumers. This section does not prohibit any of the following:

. . .

(2) The distribution of unpasteurized milk, produced on a dairy farm, to any of the following:
. . .
(b) An individual who has a bona fide ownership interest in the milk producer under par. (a), if the milk producer is a legal entity other than an individual or married couple.
. . .
(4) The incidental sale of unpasteurized milk to a consumer, for delivery to the consumer at the dairy farm where the milk is produced, for consumption by the consumer, the consumer’s family, or the consumer’s nonpaying guests. A sale is not incidental if it is made in the regular course of business, or is preceded by any advertising, offer or solicitation made to the general public through any communications media.


ATCP 60.1 Definitions

Excerpt of relevant definitions below. Click on link above for entire section.

ATCP 60.01 Definitions.

As used in this chapter:
. . .

(11) “Grade A farm” means a dairy farm for which a grade A
permit is required under s. ATCP 60.03 and s. 97.22(3), Stats.

(12) “Grade A milk” means grade A milk as defined in
s. 97.24(1) (b), Stats.

(13) “Grade B farm” means a dairy farm other than a grade A
farm.

(14) “Grade B milk” means milk other than grade A milk.


Daniels dated 1 October 2009

Click on link above to view document
File: Ltr_Daniels_100109_re_Zinniker.pdf

Letter from Cheryl Furstace Daniels dated 1 October 2009, “re: September 30 Letter sent by Attorney David G. Cox” about Zinniker Farm, Inc.


Daniels dated 20 July 2009

Click on link above to view document.
File: Ltr_fr_DATCP_072009_re_Grassway

Letter from Cheryl Furstace Daniels dated 20 July 2009 to Attorney Peter D. Kennedy about Grassway Organics Farm Store LLC


Complaint for Declaratory Judgment

Click on link above to view the document
File: wi_grassway_complaint_filed_1216092.pdf

Complaint for Declaratory Judgment filed December 2009 against Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) naming Secretary Rod Nilsestuen by the following plaintiffs:
Farm-to-Consumer Legal Defense Fund (FTCLDF)
Grassway Organics Farm Store LLC
Grassway Organics Association
Kay and Wayne Craig


Re: Incidental Sales of Milk and Cream

Click on link above to view document
File: WI-DATCP_Policy_Guidelines_4500_p167–Incidental_Sales.pdf

Wisconsin DATCP Food Division, Policy Guideline - 4500 (5 June 1985), “Re: Incidental Sales of Milk and Cream”, p. 167



AB 628

Click on link above to view document.
File: Intro_121809_Assembly–AB-628.pdf

Wisconsin raw milk bill as introduced in the Assembly on 18 December 2009 (LRB-3961/1) as AB 628; the companion version in the Senate is SB 434.

For status of AB 628, go to http://www.legis.state.wi.us/2009/data/AB628hst.html


SB 434

Click on link above to view document.
File: Intro_122109_Senate–SB-434.pdf

Wisconsin raw milk bill as introduced in the Senate on 21 December 2009 (LRB-3242/3) as SB 434; the companion version in the Assembly is AB 628.

For status of SB 434, go to http://www.legis.state.wi.us/2009/data/SB434hst.html


Last edited: 02/11/2010

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