When Monsanto introduced the bovine growth hormone (rBST) in 1994, many dairy farmers hoped to increase their profits by increasing production. On California’s north coast, Clover Stornetta Farms saw a different kind of opportunity.

Clover Stornetta Farms is a processor and distributor of organic and conventional milk products, serving the six million consumers in the San Francisco Bay Area. Clover president Dan Benedetti remembers spending the day with representatives of the big pharmaceutical companies in 1991, listening to their pitch for rBST. “We could see the handwriting on the wall. It was apparent that we were going to find ourselves in a real maelstrom of controversy if we did not look at this thing through the eyes of the consumer, as opposed to the eyes of the processor or the dairy rancher. So we had our first discussions about breaking away completely from this commodity called milk.”

“Milk had never been marketed as being the best milk ever. Milk had been marketed in the U.S. as being cold or fresh. Milk came out of a cow, it was white, that was about it.”

Dan and the six other owners of Clover Stornetta Farms knew they were uniquely positioned to create a niche market, given northern California’s progressive leanings. “It starts at Berkeley and Stanford, incredible learning institutions. We have a very highly educated, affluent, active group of consumers, more so than anywhere else in the U.S. if not the world. And we are the milkshed for those six million consumers. We talked collectively and at length and finally decided, ‘Let's just do it.’”

Since Clover doesn’t own any cows, that decision was just the first step. “We had to have the dairy families themselves to work with. We as a processor/ distributor didn’t have access to the animal or the land, and it had to start on the land.” Fortunately they were well positioned to identify milk suppliers willing to separate from the herd.

Clover has been a family operation since it started in 1977 – all seven owners come from three families, and all had worked in the local dairy industry. So they set out to identify the best dairies in their area. First they reviewed 170 dairies’ lab reports from the past year, looking at measurements of the quality of milk produced at each.

“The quality standards led us to 50 producers, then we narrowed it down even further by asking, ‘Who has the best looking dairies?’ It sounds sort of silly on the surface, but it’s amazing, good quality milk usually comes from very attractive, well maintained dairies. We want fences painted, we don’t want a lot of mud. We want to market those ranches back to the consumer so they can understand where their food is coming from.” Using a state ranch appearance scorecard, they require their dairies to score at least 90%, which got them down to 16 ranches.

But Clover didn’t stop there. “We looked at our program and said, it is conceivable that another dairy could be rBST-free, it is conceivable that other dairies could have a very good quality pool of milk, and they could have beautiful dairies – so those three aspects of the program could be copied, though its highly unlikely.” In their drive to be the best, Clover saw sustainable agriculture as something that “had the longest legs, something we could develop year in and year out.”

So the fourth leg of what is now called the North Coast Excellence program is that elusive yet enticing idea, sustainability. Says Dan, “We felt we had to have something long term to push us forward. It gave us the ability to tackle the difficult issues in the dairy industry with our producers and work together proactively to see what we could do. But we all scratched our head because nobody had defined what sustainability meant.”

“We realized we had a very difficult chore on our hands because we had 16 families that were, in every sense of the word, different. Their physical plants, their footprints, the size of their herds, the economic condition of the families – nothing was the same.” So Clover decided to start by having all of the dairy families fill out detailed farm plans created in part by the University of California at Berkeley’s cooperative extension agents.

Says Dan, “It was a long process for these families – in many cases probably for the first time to find out what their land was all about: what the physical footprint of the property they were working consisted of, how much rainfall, where was it going, where the runoff was going. I think it gave them a real good insight into what they had been doing for many years.”

Completing a farm plan was the first year prerequisite for remaining a member of the North Coast Excellence program. “In each subsequent year, each individual producer agreed to take on an aspect of their farm plan and improve it.” So for Clover, sustainability means continuous improvement.

All four of the North Coast Excellence program components are certified annually by a CPA firm. “So the cows are not certified, the ranches are not certified, it is the North Coast Excellence program that is certified annually: lab reports (quality), rBST (hormone-free), assertions we make as to ranch appearance, assertions each producer makes about ranch improvement (sustainability).” Clover’s milk is also certified as growth-hormone free annually by an independent third party. Four organic dairies have joined Clover, and they have additional feed, living condition, and health treatment requirements to meet. And it doesn’t end there.

When you are good, someone always has ideas about how you can be better. When the American Humane Association heard about the North Coast Excellence program’s sustainable agriculture component, they came to visit. The Humane Association was looking for dairies willing to transition to a new animal welfare program they had developed. In 2000, Clover Stornetta Farms became the first dairy in the U.S. to be awarded the Free Farmed label for humanely produced dairy products. This transition to humane practices precipitated a significant break from traditional practices for Clover’s producers. Their cows had to be given more space to roam and the freedom to be together and to move inside or outside when they choose. Dan describes it as “the biggest thing we were able to accomplish – it was a huge leap of faith for our producers.”

Free Farmed certification meant dramatic changes in the Clover cows’ lives. Several new barns had to be built so the cows would have room to come in out of the rain. Cows are social animals, so they are allowed to congregate, rather than being in separate pens. Tails are no longer docked, and in some cases their bedding is changed three times a day. These management practices have further improved milk quality, and broadened consumer interest.

Still, no one in the dairy industry is getting rich these days, because commodity milk prices are so low. Says Dan, “I don’t know if there has ever been enough economic return to dairy families in this country. Right now they are realizing – I don’t care if its Portland or Petaluma – the lowest prices they have ever had. Two years ago milk was at $17 a 100 weight, right now milk is at about $12 a 100 weight. That is huge difference on a monthly paycheck to a producer. So when we pay our producer an additional 50-75 cents a 100 weight, sure it’s more than anybody else, but in the grand scheme of things it is still small when you are trying to keep your head above water.”

The downturn in the milk market has not stopped Clover from paying its producers relatively well. Says Dan, “We have promised our producers from year one that as we make more money, they will make more money. So I think it is probably safe to say that they are getting paid more than any other dairy in California right now, as a group.”

All of the extra effort that goes into Clover milk only pays off when people know about it. So marketing and advertising require a significant investment. “Clo the Cow” has been a fixture on local billboards for over 30 years, in a campaign that has garnered national and international awards. Her toothy grin is usually paired with a witty pun like, “Tip Clo through your two lips!” The North Coast Excellence program provides the “nuts and bolts” educational marketing, with mailings, brochures, and full time demo people rotating among the many independent, upscale grocery stores in the area. “We work with the consumer, one-to-one when we can, we love that.

In addition to the marketing budget, Dan explains, “We have a community budget that I would venture to guess is higher than any other dairy in the U.S. Thus far this year we have given to over 514 nonprofit organizations. I am not sure if many businesses have figured out a very simple concept that my father taught me: If you take care of the people, the people will take care of you.”

This philosophy is reflected in farm operations as well. Clover’s biggest supplier of organic milk is St. Anthony’s Farm, a residential drug and alcohol recovery program that serves 40 men and women at a time. St. Anthony’s, a Franciscan organization, was one of Clover’s original 16 dairies, and the first to transition over to organic production, launching Clover’s organic line.

In spite of dramatic fluctuations in the price of milk, Clover’s revenues have consistently grown. While conventional milk consumption continues to decline, Clover’s conventional milk sales have grown by 5% in each of the last seven years. Their organic milk product sales have grown annually by 20% since Clover introduced them four years ago. At $80 million in revenue, Clover is one of the smallest independent dairies left in California. “We’ll never be as large as those dairies in the central valley and elsewhere in the U.S., but we darn near better be the best!”

Dan gives much credit back to the dairy families. “They are an incredible group of individuals – they are progressive, they are proactive, they’re the best. When you are the best, you get the spirit of wanting to do more. You do better work, you follow better practices, and you are going to stand out and be rewarded for it. That is something that is not happening enough in agriculture in this country.”

The next challenge for Clover Stornetta Farms? Dan is looking for someone to make unbleached paperboard for milk containers. “There’s got to be a way to do that economically. I’m willing to bet that the consumer will pay another 4 or 5 cents a half gallon if he or she knew it came in unbleached paperboard. If not this then there will be something else. We have to keep pushing the envelope.”

Contact
Clover Stornetta Farms, Inc.
Dan Benedetti, President
P.O. Box 750369
Petaluma, CA 94975
707.778.8448
www.cloverstornetta.org