Grass-fed organic dairy company Maple Hill Creamery received $20 million in funding from the U.S. Department of Agriculture (USDA)’s Partnerships for Climate-Smart Commodities program. The program was originally announced in September and this week, it distributed $2.8 billion to 70 pilot projects supporting climate-friendly food production.
Maple Hill, which pioneered farming incentives for grass-fed dairy nearly a decade ago, said it will use this capital to support and educate its network of small family farmers on soil health improvement through its ‘Pay for Progress’ program. Launched after a year in development, the program is intended “to educate farmers, measure and improve our industry-leading regenerative practices, and expand regenerative dairy farming.”
“This partnership with the USDA will help fund a significant portion of that program,” said Mitch Clark, SVP of supply chain for Maple Hill Creamery, in a press release. “With this support from the USDA, Maple Hill will expand its leadership in regenerative agriculture and be able to provide best practices to more farmers.”
The Climate Smart Commodities program is open to small and underserved farmers, ranchers and private forest landowners with the aim of supporting the marketing and production of environmentally-positive commodity crops via pilot projects spanning one to five years.
Maple Hill also plans to host about 30 regional educational events geared for farmers which includes one-on-one guidance from experts in regenerative and environmental practices. Data will be an integral part of Maple Hill farmers’ continued transition. Pay for Progress uses a pasture scoring system that allows the company to track soil health, diversity of plant cover, ground cover and additional regenerative tenets on each farm within its network.
As Maple Hill works to expand production, it will also work to educate consumers about the environment and health benefits of regenerative, grass-fed dairy as well as its positive impact on animals and farmers.
Developing a market around a farming innovation is not entirely new terrain for the New York-based Maple Hill. The dairy company began building the market for grass-fed dairy around 2014, operating primarily at the time as a yogurt business. But the company later shifted its attention to milk as a quicker vehicle to drive awareness.
Victor Friedberg, co-founder of S2G Ventures and an early investor in Maple Hill, explained that in addition to identifying the larger total addressable market (TAM) for a differentiated milk product – and responding to the growing confidence within Maple Hill that an expanded grass-fed dairy supply chain would be reciprocated by consumer demand – the team saw milk as a more optimal “billboard” than yogurt.
“To get grass-fed [dairy]’s benefits into the mindset of the consumer, the packaging and carton for milk was a much larger education tool and could help in the heavy lifting,” said Friedberg. “Organic had been [gaining traction] a decade earlier and in a way, the yogurt cups were insufficient to the task [of consumer education] tactically.”
Today, Maple Hill sells a lineup of grass-fed dairy products including milk, yogurt, kefir and butter with “100% Grass Fed” printed at the top of every label. The brand’s expertise will likely give it an advantage as it works to drive consumer understanding and simultaneously grow the market for regenerative dairy within its 150 farm supply network in New York state.
“Once consumers learn about the benefits of regenerative farming and 100% grass-fed organic dairy, they’ll recognize the correlation between these practices and their desires for a healthier environment, healthier animals and healthier dairy products,” said Jim Hau, president of Maple Hill Creamery, in a press release.
But outside of its network, proposals to transition dairy farms to regenerative have garnered mixed results. While funding options like government grant programs provide an initial runway for on-farm conversions, other players in the regenerative dairy space like Alexandre Family Farm, believe a premium needs to be established so that farmers across the country are incentivized to transition operations.
Additionally, although organic dairy milk already enjoys an established premium of nearly $3 compared to conventional milk, organic dairy farmers, particularly in the Northeast, have faced increased financial strain in recent years. Large corporations like Danone canceled contracts with over 100 farms in the region last year which pushed cooperative dairy businesses like Organic Valley to step up in an attempt to keep farms operational.
In the U.S., only 1% of farmland is currently organic despite the attribute generating 6% of total food sales annually. As feed prices and transportation costs continue to rise, the complexities of producing and sourcing dairy from small farming networks have also grown. Maple Hill has successfully incentivized farmer transitions in the past with organic and grass-fed, but it remains to be seen whether this program can help jumpstart the wider market for regenerative dairy products.