MILKING LABELS FOR ALL THEY'RE WORTH

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The debate over labeling milk products made a big splash in February when Monsanto Co. got the OK to market recombinant bovine growth hormone. Today, four states have approved special rBGH-free labels, but evidence is still spotty on whether consumers will respond.

"It's much more of a farmer driven issue than a consumer driven issue," said Jerry Dryer, owner of the Jerry Dryer Group consultancy, Chicago, which works with 25 processors aroundthe country that use rBGH to stimulate milk production.

"The argument is that more milk means lower milk prices, which would put small farmers out of business. My clients have really not seen a blip on the screen at all .*.*. and I have a feeling it's become a non-issue in most of the country," Mr. Dryer said.

But officials in Wisconsin, Minnesota, Maine and Vermont now are creating rules for or already allow labeling. Only Vermont is pursuing mandatory labeling.

"Our position is consumers have a right to know what's in their milk," said Eileen Elliott, assistant attorney general for Vermont. "... An awful lot of people want to say it's not a big issue-but to consumers it's a big issue."

While surveys have found consumers are aware of the issue, "intent to purchase milk has not changed," said a spokesman for the Milk Producers Federation, a group representing 40 dairy cooperatives accounting for nearly 70% of U.S. milk production.

U.S. Department of Agriculture figures show milk shipments increased in May for the first time since February. In May and June, fluid milk shipments rose 1.2% compared with the same period a year ago, after decreasing 0.1% and 0.2% in March and April, respectively.

Some see the labels as an obstacle for national marketers.

"You put your producers at a disadvantage when they are trying to sell in another state where a label cannot be accepted," said Mark Nestlen, manager of legislative and regulatory affairs for the National Association of State Departments of Agriculture.

Waterbury, Vt.-based Ben & Jerry's Homemade added rBGH-free labels to its frozen desserts in February but stopped six weeks later.

"It became too difficult to manage faced with the possibility of having a label that may not be permissible in some states," said Alan Parker, special project director at Ben & Jerry's.

However, the company continues to use raw milk from rBGH-free cows and hopes to reinstate the labels.

After Vermont OK'd mandatory labeling in April, a suit challenging the law was filed in U.S. District Court in Burlington by six trade groups, including the Milk Industry Foundation, the National Cheese Institute and the Grocery Manufacturers of America.

Vermont is proceeding with creating label rules, though the outcome of the lawsuit will determine whether they will be used. The law would require labels on all milk products indicating whether they come from treated cows.

Maine hopes to have rules in place this month, allowing milk products that don't contain rBGH to carry the Maine Quality trademark. But the labels won't refer to rBGH.

"It will become synonymous with the absence of [rBGH] here in Maine when you're talking about dairy products," said Carl Flora, deputy commissioner of the Department of Agriculture.

In Wisconsin, nearly all of the 375 milk distributors have put rBGH-free labels on their products since voluntary labels were approved in March (AA, April 18).

The general feeling is that producers haven't changed pricing for milk labeled rBGH-free.

In Minnesota, price differences for the product have ranged from nothing to up to 10 cents to 15 cents a gallon more, said Bill Coleman, director of the dairy and livestock division for the Department of Agriculture.

About 3% to 5% of milk in the state is sold as certified free of the synthetic hormone, he said.

Voluntary labeling began in May.

Mr. Coleman said he hasn't seen a great demand for the rBGH-free products, and predicted they would eventually become niche products.

Milwaukee-based Golden Guernsey Cooperative, the state's largest fluid milk distributor, is labeling milk at its two plants. Point-of-purchase signs are available for retailers.

"I think the concern of consumers is they don't understand why producers want to use [the hormone] and they're concerned about the economic impact on family farms in Wisconsin," said Joe Weis, Golden Guernsey president.

Some are concerned increased production will drive down milk prices and force smaller dairy farmers out of business.

At the 64 Pick N' Save warehouse food stores and 86 other grocers in Wisconsin, shoppers have been able to buy rBGH-free Kemp's Select milk, produced by Marigold Foods, Minneapolis, since February.

Because demand was high for the product, Pick N' Save added similar notices to its private-label brand in July.

"We still find there are those groups of consumers out there who haven't changed [buying habits], but then there are those other groups of consumers who are definitely interested in locating products either organic or certified free," said Debra Lawson, director of consumer affairs at Roundys, owner of Pick N' Save and other stores.

Cheese marketer Cedar Grove Cheese in Plains, Wis., has been labeling its products as rBGH-free since early February, and sales have nearly doubled, said owner Bob Wills.

"We've been adding about five retail stores a week in our retail accounts," Mr. Wills said, "and the people who are distributing our product are growing as fast as we can keep up with them."

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