MILK SHAKEUP: Sell-by dates spur battle between producers, retailers

2010-03-22T00:10:00Z MILK SHAKEUP: Sell-by dates spur battle between producers, retailersCHARLES S. JOHNSON Gazette State Bureau The Billings Gazette
March 22, 2010 12:10 am  • 

HELENA — A controversy has erupted over the tiny date, known as the “sell-by” or “pull-by” date, stamped on the milk containers in your refrigerator.

Core-Mark International Inc., a major food marketer and distributor, backed by some convenience stores and independent groceries, has asked the state Board of Livestock to drop Montana’s regulation requiring a 12-day sell-by date on milk containers.

Since 1980, the state has required this pull-by date stamped on milk containers.

Under Core-Mark’s proposal, the state’s current 12-day sell-by date on milk containers would be replaced by one chosen by individual milk processors, which would determine the length of time needed to protect consumers. There would be no standardized Montana sell-by date,

Core-Mark’s proposal says, in part: “No Grade A pasteurized milk may be put in any container marked with a sell-by date which does not reasonably protect the health and safety of Montana consumers.”

Officials from Core-Mark’s Spokane office were unable to comment for the story because of a past “gag order” agreement with the Livestock Board.

Advocates of the rule change say it would open the door for stores to buy more milk for lower prices, often from out of state. They say Montana consumers would reap the savings.

“It would be more competitive,” said Jim Edwards, owner of Pattee Creek Market, an independent grocery in Missoula. “Me buying milk from Spokane is no different (in distance) than me buying from Bozeman. When we start bringing milk in across the border, it would bring down the price.”

Edwards said the rule results in milk prices that are 50 cents to $1 a gallon higher in Montana.

Stores also no longer would be forced to dump as much milk as they now do when the sell-by date has expired, he said. Several store owners estimated they routinely have to discard anywhere from 4 to 6 percent of their milk after 12 days.

Montana is one of a few states with 12-day sell-by dates, Edwards said. Idaho, South Dakota, Wyoming and Washington have no such dates, while North Dakota has an 18-day sell-by date, according to information compiled by advocates of the rule change.

“The dairies don’t want the dates to go up,” he said. “It’s great for them. If I had another six days on my milk, I would have virtually no throwaway.”

Earl Allen of Missoula, marketing manager for High Noon Petroleum and its convenience stores, called it “pure protectionism” for Montana to have this sell-by date. He believes the 12-day sell-by date works to the advantage of Meadow Gold, a large national company with milk processing plants in Great Falls and Billings, rather than to Montana dairy farmers.

“The consumer ends up paying more,” he said. “You’ve got retailers that basically have to waste milk days before it truly goes bad. You have one large processor who controls a huge share of the market.”

Mark Olson, who owns some Ole’s Country Stores in Missoula, said he has been able to slash the retail price of milk by up to $1.50 a gallon since he started getting milk from Core-Mark. He sells it at cost — two gallons for $5.

“We’ve gone from selling almost no milk because it was so high-priced,” he said. Ole’s now sells 1,000 gallons of milk monthly, or 10 times the volume, since getting milk at much lower prices from Core-Mark.

Olson said the Livestock Board’s 12-day sell-by date “is basically a deal to keep out-of-state milk out of Montana.”

“They don’t want any competition,” he said. “They’re interfering with interstate commerce.”

Core-Mark, convenience and some independent grocery stores and Darigold favor the rule change.

But dairy farmers, Meadow Gold, Country Classic Dairies, jobbers and, perhaps even more importantly, the Department of Livestock’s Milk and Egg Bureau chief are opposing the request to drop the current sell-by date. The State Bureau was unable to get comments from Meadow Gold or Country Classic officials.

“I think it’s completely unnecessary,” said Tim Huls, a dairy farmer whose family has run Huls Dairy in Corvallis for five generations. “I don’t think the public’s confused about the fact that the milk will last for a couple of weeks or 10 days after they purchase it from the store shelf. They’re used to the system we have. It’s been in place since the early 1980s.”

Talk of turmoil at the dairy case is “highly exaggerated” and “manufactured” by a few convenience stores, Huls said. Most Montanans don’t buy their milk at convenience stores, he said.

If the sell-by date is removed, as proposed, “the opportunity to have a bad experience with milk would be greater,” Huls said.

He disputed critics’ charges that the current pull-by date amounts to protectionism.

“We have rules here for Montana,” Huls said. “We have to play by the rules, and they (convenience stores) have to play by the rules. The question is who gets the benefit of longevity of milk. It’s a perishable product. Our feeling is consumers ought to have their fair share of time to consume milk after they purchase it.”

Ken Heberling, owner of Dillon Dairy Products, warned the Livestock Board that “a good viable (Montana) milk industry will be eliminated by out-of-state milk. Farmers may start selling off their milk cow herds, he said.

Dan Turcotte, chief of the Milk and Egg Bureau of the state Livestock Department, testified before the Board of Livestock earlier this month in favor of keeping the 12-day sell-by, or pull-by, date and against Core-Mark’s proposal.

“In my opinion, the present 12-day pull-date rule is most acceptable to the milk-consuming public,” he said. “They are accustomed to it and they purchase milk products with a great deal of confidence that it will continue to taste fresh and be of a high quality for a reasonable time after their purchase.”

In performing his job, Turcotte said he has encountered “virtually no complaints from the public over the quality and freshness of milk purchased in Montana.” Only a few consumers have voiced a need to change it, he said.

Before the board adopted the 12-day sell-by date in 1980, he said, milk plants used a variety of pull codes, ranging from 10 to 17 days, leaving consumers confused. Although the milk industry was reluctant to have the rule adopted in 1980, Turcotte said the various elements of the milk industry now support it.

“They very much appreciate and greatly value the confidence expressed by the consuming public, and they have found that they can comply with the requirement, and that doing so takes only reasonable action on their part,” Turcotte said.

The Board of Livestock took up Core-Mark’s proposal at a hearing earlier this month, and it was continued until April 26. After both sides file legal briefs, the hearing officer will make a recommendation to the board, which may take it up for a vote in July, said Christian Mackay, the board’s executive officer.

Seven people sit on the Livestock Board, whose duty is to promote, regulate and foster the livestock industry in Montana. State law specifies that the board is made up of four cattle producers, one sheep producer, one dairy producer and one swine producer.

The board’s decision may not end the fight, but it may set the stage for a lawsuit if Core-Mark’s proposal fails, some observers speculate.

Core-Mark's request to change the rule is the latest battle over milk between the Livestock Department and some Montana convenience stores that purchase their milk from Core-Mark. In the summer of 2008, the department issued warning letters to Ole's Country Store in Missoula and Conoco Trading Post in Billings for selling milk, which Core-Mark imported from Washington state, with 21-day sell-by dates in violation of the state's 12-day rule. (This last paragraph contains a correction to earlier version regarding the warning letters.)

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