June 6, 2012 | Melinda Clark

Sam Simon, the President of Hudson Valley Fresh, a not-for-profit cooperative consisting of eight dairy farms – and 1,200 cows – in Dutchess, Columbia and Ulster Counties in New York State, believes that all milk is not created equal. And through adherence to strict standards of quality, humane treatment of animals, segregated milk processing and the resultant songs of praise for the cooperative’s products from countless consumers and retailers, Hudson Valley Fresh appears to bear out Simon’s belief.

The premium quality milk and milk products produced by the cooperative – including half and half, heavy cream, sour cream and ice cream mix – are sold locally in the Mid-Hudson Valley, Long Island, New York City, New Jersey and Connecticut.

Hudson Valley Fresh was created by Simon, a retired orthopedic surgeon who also maintained a home dairy farm, and has been milking cows for more than 50 years. The cooperative was a solution to two serious problems in the area’s dairy industry: it often cost more to produce milk than was earned by selling it, and milks of different quality were often blended together, damaging the integrity of the high quality milk.

“I realized the predicament that dairy farmers are in,” says Simon. He gives as an example 2009, when farmers were receiving less than $1.20 for a gallon of milk – and spending $1.99 to make it. “I said, someone has to be an advocate for the farmers.”

He points out that the main reason for the drastic decrease in farms over the last 40 years – and the shortage of next generation farmers – is financial. “The next generation realized they couldn’t sustain it, so why do it?…It’s a great way of life. But you need to be able to feed your family,” explains Simon.

By ensuring a fair price for the farms’ product, Hudson Valley keeps those farmers – and that land – in the dairy business.

High standards and quality

In addition to paying its farmers a “sustainable premium,” Hudson Valley Fresh prides itself on the high quality of its products. The co-op does copious testing and requires all of its members to produce milk with a somatic cell count that’s less than 200,000. To put that number in perspective, the average somatic cell count in the marketplace is 400,000, with an upper limit of 750,000. Low somatic cell count is associated with higher Omega 3 fatty acids (vital for normal metabolism functioning). Infection is the number one cause of elevated somatic cell counts.

“I strongly believe that all milk is not created equal,” says Simon. “Healthy cows in a clean environment will produce a better quality of milk than cows that are in an unclean, stressful environment.”

The standards for the co-op’s milk revolve around that premise. They take into account the individual care of each cow, how she is prepared before, during and after milking and the cleanliness and tranquility of the environment.

To be accepted into the co-op, a farm must have gone a full year with somatic cell counts under 200,000. The milk from each herd is tested at the farm the day it’s picked up, and the farms pay for the Dairy Herd Information Association (DHIA) to come out to the farms on a monthly to twice monthly basis to check the milk of every cow for somatic cell count, raw bacteria count, butter fat and protein content.

Explains Simon, “We’re very transparent. We don’t talk about quality. We live it. There’s not individual milk that has those kinds of strict standards. For that I demand that farmers get a fair price.”

Independent processing

With such high standards for its milk, it stands to reason that Hudson Valley would require the same integrity in its processing plant. Simon explains that about 25 percent of farms in the marketplace produce milk of a similar quality to theirs, but the difference is that most milk gets blended with other milk, often of inferior quality. Hudson Valley uses its own dedicated processor to ensure that consumers are only getting Hudson Valley milk. Milk from the farms is processed at Boice Brothers Dairy in Kingston, New York, a plant solely dedicated to Hudson Valley Fresh milk.

For Jim Davenport, who owns Tollgate Farm with his wife, Karen, that’s a definite plus. They’ve been a member of Hudson Valley Fresh for about three years, and appreciate that “all the producers have to be really top tier.”

Davenport adds that anytime there’s a milk quality concern, the milk producer is usually blamed, when in reality it is often a result of carelessness on the part of the processor. The milk gets inoculated with bacteria – often from dirty equipment – after it’s already been pasteurized.

At Hudson Valley, that’s not a concern.

“With us, the guy that’s bottling our milk for us, he is just a meticulous guy. He won’t settle for anything less,” says Davenport.

He says that the long shelf life of Hudson Valley Fresh’s milk is a testament to its quality. He likes to challenge consumers to do a taste test – to leave a gallon of generic milk and a gallon of Hudson Valley milk with the same sell-by date in the refrigerator, untouched. “A couple days after the sell-by date, open them up and taste them…Our shelf life is outstanding because the quality is. The guy that runs the plant is a stickler for details. Everything is perfect. There’s no gimmick, we don’t spend oodles of money promoting it.”

In fact, the co-op tries to keep all expenses low. They don’t spend much on office space, don’t have a web developer on staff, and in general try to avoid extra costs.

Davenport says they employ this bare minimum technique in their farm management as well, practicing low input sustainable agriculture.

“We put the bare minimum to keep our crops in good shape. The only times our cows get treated is if they’re sick. I just tell people, once again I go back to the shelf life thing. Buy it and stick it in the fridge, you tell me which tastes better.”

Simon says that consumers often ask why the co-op is not certified organic. He explains that some of the practices Hudson Valley uses aren’t allowed in organic, but not because they’re necessarily bad.

“[Organic is] more focused on, do you use pesticides,” says Simon. “We’ll use chemical fertilizers. We vaccinate our cows against diseases that are tick-borne or carried by horses or coyotes…You’re not allowed to vaccinate cows if you’re organic. We’ll use antibiotics on the cow, but that milk will be separate and will never go to market…We’ll treat a cow if she’s sick and it’s appropriate. I’m a physician; I’ll treat my kids, why wouldn’t I treat my cow?”

Letting the milk speak for itself

Simon says that educating the public about their product – why it’s a little more expensive, why it’s not organic – has been one of the biggest challenges that the co-op has faced. “I just let the milk speak for itself,” he says.

Davenport echoes this sentiment. To help introduce the public to the milk – and the farmers behind it – Hudson Valley members are responsible for conducting tastings in stores and schools.

Says Davenport, “What’s worked out for us is, because the quality is so good, it kind of sells itself. We do tastings – different members go down to Manhattan and do tastings – and people try the milk and they love it. It’s worked out really well for us.”

Aside from the tastings, the cooperative takes care of all marketing, sales and distribution, allowing the farms to “just focus on producing quality milk,” says Simon.

He explains the co-op’s model: To enroll in the co-op, each farm contributed a membership fee, from $3,500 to $4,000. The farms sell their milk to the co-op at the commodity price. All costs of production – expenses, transportation, etc. – are figured into the final price for the milk, which is then marketed to a variety of stores. Simon says the price of Hudson Valley products typically falls in the middle of the spectrum – more expensive than generic and less than organic.

Regardless of their production size – and the farms do range in size, from herds of 50 to 200 cows – all members are equal recipients of the co-op’s monthly dividends. Explains Simon, “It’s not based on how much they milk, it’s based on how much milk we sell.”

Davenport explains that during high times, the co-ops don’t see much of a difference, because Hudson Valley prices stay fairly even. But, “Hudson Valley Fresh helps iron out the low spots,” he says. “And the consumers like the fact that the profits go right to the farmers. And they like the idea that they can go online and see each farm. The local thing makes a difference.”

Tollgate Farms is known for producing very high quality milk; according to Simon, Davenport has been recognized nationally as producing the best quality milk in the country. But even with a great product, Davenport says that it’s tough to make a living as a dairy farmer, particularly in their location.

“The costs of production are pretty high in eastern New York. We just have higher taxes and costs that are tougher. Our farms are smaller. You get the economies of scale – very large, efficiently run operations can make cheaper milk than we can. But they don’t get the quality.”

A successful model

To date, the co-op’s model has been quite successful. The co-op is in its sixth year, and its revenue has always exceeded its expenses. Over the last two and a half years, it has experienced 50 percent annual growth.

Simon attributes the co-op’s success to the quality of its product. “That’s where the growth has been – people talking. We don’t do a lot of advertising,” he says.

It doesn’t hurt that Hudson Valley has some big names in its corner. Simon says that five years ago, Eli Zabar – of Eli’s, a well-known Manhattan grocery store – called him up after someone had brought him a half gallon of the co-op’s milk.

“He calls me up at six in the morning, and hears the cows in the background,” recalls Simon. “He says, ‘you’re a doctor.’ I say, ‘I’m retired.’ He says, ‘This is tremendous, how much can I get?’ I said, ‘more than you can drink.’”

Eli isn’t the only one demanding Hudson Valley Fresh. In the 24 local Whole Foods Markets, the only heavy cream used is Hudson Valley Fresh – over 500 gallons of cream a week.

Simon says that there are three important factors for a cooperative like this to work: 1) Someone willing to spend the time and the energy to start it and drive it, 2) a plant that’s willing to segregate your milk and put it on your own label and 3) farmers who are like-minded and willing to produce a quality product.
The financial benefits of an operation like Hudson Valley Fresh extend beyond just the members of the co-op. Simon says that the dairies have a positive economic impact on the community, as well: every milking cow generates $15,000 annually to the local community.

Plus, says Simon, the money generated by the farms goes right back into the local area.

“Farmers don’t spend their money in Europe,” he says. “They’re spending it locally, right where they work.”

If you’re in the New York State area, keep an eye out for Hudson Valley Fresh’s new yogurt line, debuting this month.