# Loophole: How to sell raw milk



## Tam319 (Jan 6, 2007)

Hi all,

I just read an article in Canada Small Farm magazine (March/April 2007) that was very interesting. Its illegal to sell raw milk, but one dairyman has found a way around the law. He sells shares in his cows for $300 and supplies raw milk to the "owners" of the cattle. He charges $2/litre for feed, labour and bottling. Technically he's not doing anything illegal as the people consuming the raw milk are the owners and he isn't selling it directly. Apparently authorities have tried to shut him down numerous times but unless he is selling the raw milk directly they can't do much.


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## jerzeygurl (Jan 21, 2005)

they use that loop hole arround here as well, not sure if it holds up in court or not :shrug:


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## vallyfarm (Oct 24, 2006)

My one neibour sells 1 gal jugs for $8. They may be dirty jugs... full of goat milk. The buyer is responsible for emptying the jug! Mike


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## Christiaan (Mar 13, 2004)

The share scheme has been used around here, too. Generally the state informs the IRS of possible irregularities and that usually shuts them down. The farmer includes the shared animals as his own stock, which it of course no longer is. Just the math discourages most of them from continuing their share program.


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## Ken Scharabok (May 11, 2002)

Do a seach on the forum on share milking as this has been a topic before.

(Note share milking or sharemilking can also be another concept in which the dairy farm is operated by a third party for a percentage of the milk realized, sometimes with the eventual ownership of the operation. This started out in New Zealand, but is used occasionally in the U.S.)

I believe it is www.realmilk.com which looks at the legal consideration. Essentially if you charge by the gallon/liter you are selling raw milk retail. A true share milk agreement must reflect the actual costs involved and the participants get a certain percentage of the typical production of that cow.

I'm pulling numbers out of the air for illustration purposes only.

Say you had a milk cow worth $2,000. You sell ten shares of that cow for $200 each. Now say the cow of her nature produces five gallons per day. On a daily basis then each of the ten users would be entitled to one-half gallon or no more than 3.5 gallons per week. If they are allowed to purchase more then you are selling milk from non-share cows at retail. When she is dry none of the share owners would get any milk.

(Added: If a cow produced more milk than the share holders could use, then technically the farmer would have to buy it back from them as the share cow belongs to them. The farmer is just acting as caretaker.)

A share milk agreement must also realistically reflect the maintenance cost of that cow. Say it is $100 per month excluding labor and $100 month for labor. Each should have to pay then a $20 per month maintenance fee. The farmer's profit would be in his labor cost.

The milk should not be sold on a unit basis, but rather free after paying the initial buy-in and monthly maintenance.

Techically a calf from that cow belongs to the share holders, although the farmer might be able to charge AI or a stud fee against the maintenance cost. If the calf is sold, the net proceeds belong to the share holders. If the cow dies the loss should be strictly the share holders. If the cow is culled the net proceeds should be divided among the share holders or used to offset the cost of a replacement.

The same basic concept would apply to a herd share agreement to where you, in effect, buy into the herd and then get milk from the bulk tank. Here again, a share holder should not receive more than what their buy-in would permit and should make a reasonally prorate monthly payment towards feed and maintenance.

I suspect technically a separate records book would have to be kept on the share cows as if it were a stand alone operation. For example, if a farmer had 40 cows and ten are on share milking, then the costs associated with the 30 should go against his farm account and the costs associated with the 10 should go against the share milking account. They would pay taxes separately. For example, they may show a loss with the 30 and a profit with the ten.

Remember Al Capone didn't go to prison for any of the crimes he may or may not have committed, but rather for evasion of income taxes on the profits thereof.

Some folks may sell raw milk as for pet use only. However, it would be considered as pet food and that is also regulated in some states from what I understand.


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## jersey girl (Nov 21, 2005)

Yes, raw milk sold as pet food only is allowed in some states. Ohio does not even allow that. Each state has their own laws about milk. 
You can find sample copies of the herd share agreements on the net. Don't know the exact site but you can find it through 
www.westonaprice.org
Their agreement has held up in several court cases. 
Joanie


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## Ken Scharabok (May 11, 2002)

Here is the specific link:

http://www.realmilk.com/cowfarmshare.html

Apparently the USDA also doesn't seem to apply the same standards to goat milk as they do cow milk.


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## DaleK (Sep 23, 2004)

Tam, just because he says it's legal, doesn't mean it is. It's in the process of going through the courts now and any legal expert I've heard discussing it expects him to lose.


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## woolyfluff (May 23, 2004)

here in Pa. the one farmer does out a jug on top of of his hotwater heater and you make a donation of $1.50 per gallon of milk you want you have to fill your own jugs most time it taste pretty good


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## Ken Scharabok (May 11, 2002)

Woolyfluff: Technically that is the concept of he is giving it away free, but people have the option to make a donation to his favorite cause or such, even if it is himself. Another approach would be a milk house tour with a free sample afterwards. As noted above they had better be reporting the donations as income.

I haven't heard anything about it lately but there was a case in the Upper Midwest (OH or MI I think) where a USDA undercover agent visited one share milker and talked the farmer into giving him a gallon of milk. Might have been OK, but the agent insisted on giving the farmer $2.00, which he eventually accepted. Waa-laa, retail sale of raw milk.

I'm told raw milk sales go on all the time within (but not outside of) the Amish/Mennonite community south of here.


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## francismilker (Jan 12, 2006)

In Oklahoma, it's legal to sell up to 100 gallons of raw milk off the farm each month. These sells can only be made off of a homesteader farm. A licensed commercial dairy isn't able to sell off the farm as he is under contract from the milk cooperative. The contract specifically designates the cooperative as the only receiver of ALL of the milk produced on the farm. Any dairyman caught in the act of even giving a neighbor a gallon is subject to the revoke of his contract. I've visited with the state dairy inspector and he doesn't have a problem with me selling milk off of the farm.


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## jerzeygurl (Jan 21, 2005)

francismilker said:


> In Oklahoma, it's legal to sell up to 100 gallons of raw milk off the farm each month. These sells can only be made off of a homesteader farm. A licensed commercial dairy isn't able to sell off the farm as he is under contract from the milk cooperative. The contract specifically designates the cooperative as the only receiver of ALL of the milk produced on the farm. Any dairyman caught in the act of even giving a neighbor a gallon is subject to the revoke of his contract. I've visited with the state dairy inspector and he doesn't have a problem with me selling milk off of the farm.



that is a reasonable law in my estimation,

arround here its the pet food only thing,


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## FalconDance (Feb 4, 2007)

Ken Scharabok said:


> I'm told raw milk sales go on all the time within (but not outside of) the Amish/Mennonite community south of here.


Don't know offhand where you are, but the Amish community east of here sell cow's milk fresh from the morning milking to anyone who wants it at their bulk store. Maybe our laws aren't as strict, dunno. But it's some *good* milk and I haven't heard of anyone getting sick yet. They also sell fresh eggs but have to have an egg permit for that.

~Falcon


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## Tango (Aug 19, 2002)

I'm not at all interested in raw sales. Too many people are law suit happy and the slightest stomach ache, real or contrived, would be all they need to turn me in and try to take what I have worked for. As far as I'm concerned, let them buy their own cow or buy the milk replacer in plastic gallon jugs they sell at supermarkets. In Tennessee, it is illegal even to give milk away, raw or not, for humans or for pets.


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## Ken Scharabok (May 11, 2002)

"In Tennessee, it is illegal even to give milk away, raw or not, for humans or for pets."

Again the laws may be different for goats vs cows. There is a place in New Johnsonville (TN) which openly sells unpasteurized goat milk.


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## lilsassafrass (May 13, 2002)

They are closing up the raw milk loopholes here in Ohio .. donation /pet/ shares ... there was yet another artical about it in the Farm and Dairy a few weeks back over the Amish fellow who back in the fall was nailed for selling raw milk .. not long ago was nailed again via a diferent avenue/loop hole for dispensing raw milk .. big court battle .. and oda involvement .. ohio really doesnt want anyone to have raw milk .. they are even trying to make it difficult to produce your own and consume it 
thing was with the amishman .. if I recollect correctly some one became ill and it was linked to his raw milk supposedly ....
I imagine a google search would turn up info

Paula
Hyde Park Farm


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## Tango (Aug 19, 2002)

You're probably right Ken. Was only referring to cow's milk in my post.


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## Terry W (Mar 10, 2006)

Paula-- I KNOW that Amish farmer-- And the whole community in the area is really ticked off-- both Amish and English!!! Then, the new case involves someone from Ky coming into Ohio and getting raw milk from a "shared" cow in the southern part of the state. Ohio claims that agriculture is the MAJOR industry--yet the laws are closing down the small farm faster than one can blink an eye! Shoot-- the county fairs, which are supposed to be AGRICULTRAL in nature are more like CARNIVALS!!! Do you live near enough to join Geauga Family Farms? The meetings are held in Middlefield-- and we even have people come in from Pa and Indiana for some things!


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## Milkwitch (Nov 11, 2006)

I have not looked into to it, but I have been told that it is illegal to even give raw milk to my children! Much less sell it! What REALLY ticks me off is that the fines for selling raw milk is higher than for selling crack cocaine !! IMO maybe if more attention and money were spent dealing with dealers and gangs and the like everyones lives could be better.


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## wr (Aug 10, 2003)

Milkwitch, I totally agree with you. Schools allow vending machines that sell garbage to kids, cafeterias feed food laced with preservatives and various chemicals and any school field trip stops at the Golden Arches for the students to 'fuel' their bodies and the person selling raw milk has to sneak around like a crack dealer :shrug:


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## jerzeygurl (Jan 21, 2005)

good points


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## michiganfarmer (Oct 15, 2005)

I have thought about having neighbors give me a hand with chores, and if some milk dissappears, I dont know anything about it.


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## lilsassafrass (May 13, 2002)

Terry W said:


> Paula-- I KNOW that Amish farmer-- And the whole community in the area is really ticked off-- both Amish and English!!! Then, the new case involves someone from Ky coming into Ohio and getting raw milk from a "shared" cow in the southern part of the state. Ohio claims that agriculture is the MAJOR industry--yet the laws are closing down the small farm faster than one can blink an eye! Shoot-- the county fairs, which are supposed to be AGRICULTRAL in nature are more like CARNIVALS!!! Do you live near enough to join Geauga Family Farms? The meetings are held in Middlefield-- and we even have people come in from Pa and Indiana for some things!




I remember reading about the incedent way back .. and I do know everyone is upset ... serious fines etc was my understanding for some reason (and my memory isnt so good ) i was under the impression that the first incdent was down in Kidron area .. well Holmes county at least, i missed the fact it was the Middlefield community .. maybe the more recent was down in holmes...
yes I do live with in an hours drive of middlefield ... and have fellow cattle breeders who's home fair is geauga..my vet is fair vet there as well, at least for the food animals .....
I belong to to many organiztions as it is .. and saddly don't have the time to get to all the meetings for teh ones i do belong to ... my biggest thing is to get to as many township meetings as I can (and thats not as many as I would like ) to keep the trustees from causing trouble for the area farmers .. (namely me ....

I havent sold milk in years... it used to be goat milk when i did , for pets .. what you did with it was your concern .. bring your own jugs 

I really see raw milk being an issue in custody battles , and children services issues.. ie) endangering , in the not so distant future.

I ran into problems 17 years ago when my youngest was born .. i had switched pediatricions .. my older two went to my pediatrition who retired from practice at the young age of 97 ! the new one was a DO .. and came highlay recomended ... but at the first office visit (1 week ) of my then newborn daughter .. and I admitted that she was getting goatsmilk when asked what brand of formula I was using .. I was seriously upbraided for doing so and was told goat milk was for baby goats !! .. my retort was: so soybean milk is for baby soybeans .. picked my daughter up and walked out ... never went back 
You know i wasnt an 18 year old new mother I was thirty three years old raised 5 other children 2 of wich were mine .. I wasnt ahint the door when brains were passed out .. knew to pasturize for infants .. been doing it for many years .. just because I prefered to drink it raw ... sheese what kind of idiot did that doctor think I was ?.. ohh well it was long ago ... but was suprised at the time I wasnt reported to children services .....

Its a matter of dairy conglomerations trouncing out any and all competition 
usuing health as a scare tactic..with government backing, not that health is not a major concern .. absolutly it is , but so is liability if you become accused as the source for some ones illness let alone the legal ramifications 
And in this day and age of food born illness scares I think restrictions are going to be more forcefully upheld ... and that bodes ill for all of us who just want to produce our own food for our families and neighbors .

Paula
Hyde park farm


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## Terry W (Mar 10, 2006)

michiganfarmer said:


> I have thought about having neighbors give me a hand with chores, and if some milk dissappears, I dont know anything about it.


 That is what happens at one dairy farm here--- the "helping neighbors" are four Amish and two English-- and about 10 gallons just don't seem to make it from the bulk tank to the truck on a daily basis.( I think there must be a leak sumplace :rotfl: )... No money changes hands at all-- the "hrelpful" neighbors also get "free" excavation, hay, transport, etc-- it all works out....


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## stanb999 (Jan 30, 2005)

Ken Scharabok said:


> Woolyfluff: Technically that is the concept of he is giving it away free, but people have the option to make a donation to his favorite cause or such, even if it is himself. Another approach would be a milk house tour with a free sample afterwards. As noted above they had better be reporting the donations as income.
> 
> I haven't heard anything about it lately but there was a case in the Upper Midwest (OH or MI I think) where a USDA undercover agent visited one share milker and talked the farmer into giving him a gallon of milk. Might have been OK, but the agent insisted on giving the farmer $2.00, which he eventually accepted. Waa-laa, retail sale of raw milk.
> 
> I'm told raw milk sales go on all the time within (but not outside of) the Amish/Mennonite community south of here.


In PA you can get a raw milk sale license . They test your milk three times if it's totally clean each time you can apply. You can only sell off farm. If you provide containers you must have a bottling setup. If not you just sell as you fill.


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## Ken Scharabok (May 11, 2002)

"You can only sell off farm. If you provide containers you must have a bottling setup. If not you just sell as you fill."

Does off farm mean only on the farm (customers come to you) or you cannot sell on the farm?

Personally the liability potential would be a severe drawback. If e-coli were found in the milk you sold it just gives people a chance to sue you. May come down to the question of if it came from the container or the milk. The chance to lose everything you have worked for is there - like it or not.

Seems like there was a case in the Pacific Northwest were bad raw milk, which make several people very ill, was traced back to a producer. Seems like there were a couple of lawsuits going on it. Anyone remember this?


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## Milkwitch (Nov 11, 2006)

before we got our place we used to go to a small dairy and we would just bring our gallon jug and go draw off the milk from the tank, use the hose to wash down any drops and leave 2$ in a cup. The biggest thing here is if someone gets sick, the Drs report and that is how someone would get charged. I think mostly Dept. of Agra. are understaffed....but it is the principle of it: that they could ruin you if they took the notion.


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## HazyDay (Feb 20, 2007)

I sell goat milk easy. Just tell others you have goats/cows and you have milk. They then tell others and they come to you. I don't know if they drink it, and they just asked if I had milk for sale. I NEVER KNEW THEY DRANK IT! (well I do but if some one asks I sell it not knowing what they do it.)


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## furholler (Feb 1, 2005)

HazyDay said:


> I sell goat milk easy. Just tell others you have goats/cows and you have milk. They then tell others and they come to you. I don't know if they drink it, and they just asked if I had milk for sale. I NEVER KNEW THEY DRANK IT! (well I do but if some one asks I sell it not knowing what they do it.)


Interesting info.


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## donsgal (May 2, 2005)

Tam319 said:


> Hi all,
> 
> I just read an article in Canada Small Farm magazine (March/April 2007) that was very interesting. Its illegal to sell raw milk, but one dairyman has found a way around the law. He sells shares in his cows for $300 and supplies raw milk to the "owners" of the cattle. He charges $2/litre for feed, labour and bottling. Technically he's not doing anything illegal as the people consuming the raw milk are the owners and he isn't selling it directly. Apparently authorities have tried to shut him down numerous times but unless he is selling the raw milk directly they can't do much.


A dairy in the area labels the milk "Not for Human Consumption" and sells it as pet food only. What people do with it, he says, is not his business.

I don't know if that would hold up legally either!

donsgal


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## Terry W (Mar 10, 2006)

donsgal said:


> A dairy in the area labels the milk "Not for Human Consumption" and sells it as pet food only. What people do with it, he says, is not his business.
> 
> I don't know if that would hold up legally either!
> 
> donsgal


 We have a lot of "un-permitted" septic systems here-- the guy who excavates the holes says-- " I don't know , nor do I care ,what they put in it after I dig it"

Maybe it's time we have another Tea Party...


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## mamagoose (Nov 28, 2003)

If the admission of the nutritional value of raw milk was released to the public, then consumers might realize that they are getting the short end of the stick in supermarket milk and all demand (organic) raw milk. That would turn the industry/officials on their heads. 

Peasants must think like we are suggested to think - Raw milk is BAD for me and mercury fillings in my head, public water, prescription drugs, hydrogenated oils, high fructose corn syrup, BHT, MSG, aspartame, saccharin, growth hormones, GMOs, etc. are NOT bad for me because the government said so. And they tell me again and again... They wouldn't allow all those things in our food supply/bodies if they were bad for me. They make laws to PROTECT me. What would I do without the government???

Too much milk from a family cow? Milk a crossbred. I can think of lots of positive reasons. eta: I mean a dairyXbeef cow.


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## Ken Scharabok (May 11, 2002)

"A dairy in the area labels the milk "Not for Human Consumption" and sells it as pet food only. What people do with it, he says, is not his business."

Again, my understanding is some states have regulations concerning manufacturing pet food. Their state may have none which apply, or the dairy is in compliance with them if they exist.


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## Lizza (Nov 30, 2005)

From the realmilk site a few months ago we realized that we could sell raw milk, on farm only, no advertising at all, as long as we have a maximum of 3 lactating cows and 9 lactating goats. Right now we are selling raw goat milk for $5 a half gallon and hope to add raw cow milk, once we get the cow at least! We live in Oregon, btw.


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## Ken Scharabok (May 11, 2002)

Morningstar:

What regulations come along with that. For example, do you have to milk in a separate, dedicated, milk parlor? Must the milk be refrigerated? Must customers bring their own containers? Are you required to put on a label with say your farm name and location and date of bottling or best-if-use-by date?


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## blueknitter (Oct 13, 2005)

I just had to pipe in and say: Good for him!!! And anyone else who does this!!


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## sammyd (Mar 11, 2007)

In WI the cow share thing was shot down and I believe they have to buy shares in the whole farm, and even that is under fire.

I would never sell raw milk to people that bring in their own containers unless I knew them personally and knew they understood cleanliness.
I don't think I would sell it at all unless I knew the people personally anyway.


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## Lizza (Nov 30, 2005)

Hi Ken,

So far we can barely keep up with people from my BIL's work (he works for a wholesale organic produce company). We haven't actually dealt with any strangers as of yet. I haven't charged a deposit on my canning jars because they always come back to me and my BIL sees them everyday if they don't.

I don't know anybody else that sells raw goat milk but I know 2 people that sell raw cows milk (both have a waiting list) and I believe they both do charge a deposit for their canning jars. I've bough milk from one of them and it didn't have a label of any kind. I am actually contacting the other one this week to see if we can get some raw cows milk for our household. One did try to advertise in the paper once and did get in trouble for that. As far as I know there aren't any other restrictions. Below is the copy/paste from the realmilk site for Oregon. 

Our hope is to do a "friday at the farm" day every week that we could sell milk, cheese, bread, eggs, produce, canned items, ect. We are still researching that though. 


<<Oregon
Raw goat or sheep milk sales are legal on the farm and in retail stores. No permit is necessary for farmers with no more than nine producing goats and nine producing sheep who sell the milk on the farm directly to the consumer. Raw cow milk sales are illegal except for on-farm sales where the farmer has no more than three producing cows on the premises. The state prohibits advertising for on-farm sales.

Farmers producing raw goat or sheep milk can sell in retail stores if they obtain a producer-distributor license and have their own bottling plant on site. Licensees can sell goat or sheep milk products such as butter, cream, yogurt, and cheese as well. There is one licensed goat milk farmer in the state at the present time.>>





Ken Scharabok said:


> Morningstar:
> 
> What regulations come along with that. For example, do you have to milk in a separate, dedicated, milk parlor? Must the milk be refrigerated? Must customers bring their own containers? Are you required to put on a label with say your farm name and location and date of bottling or best-if-use-by date?


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