A Peek Into the Future of Raw Milk: The Worlds Biggest Cowshare?

FDA%20plate%20and%20OPDC%20sign%20002.jpgOne of the cardinal rules of venture capitalists is to avoid investing in small companies starting up in industries with heavy government regulation. This rule has helped explain in the past why we didn’t see a lot of startup companies in areas like insurance, or see venture capitalists pursuing dairy farms. Investors don’t like to be involved with companies that have to justify price increases or where there are lots of officials rules, which can be changed by legislators who control the regulators.

But, of course, every rule is made to be broken, and when the possibilities for growth are so strong, or the potential profit margins so large…well, exceptions can be made.

All this is preamble to letting you know that Organic Pastures Dairy Co., the nation’s largest raw milk dairy, in California, is negotiating with private investors for a major cash investment.

Mark McAfee, the owner of Organic Pastures, says he is meeting next week with the principals of a $1.5 billion private equity investment firm “that wants to see raw milk change nutrition and illness patterns in the U.S. They also see that a great deal of market growth and smart money can be made.”

He doesn’t want to mention the firm he’s negotiating with, or possible details of a deal, since nothing has yet been finalized. But he says the firm’s principals are well aware of all the regulatory turmoil in the raw milk arena, and aren’t fazed.

Indeed, I take Mark’s openness about his disputes with the Food and Drug Administration and other agencies as evidence that the investors appreciate how FDA invective seems to stimulate sales—free advertising, as it were. Mark even sent along a photo one of his employees took of the license plate of an FDA car—cutely emblazoned with an Organic Pastures promo flyer–when Organic Pastures was visited by an inspector a couple weeks ago in connection with the recall of raw cream possibly containing listeria monocytogenes.

The private investors “see us as a market disrupter,” he says. Yes, I’d say Organic Pastures has been a market disrupter.

Mark views outside investment as a way to grow Organic Pastures much more quickly than it might otherwise–so significantly that there might eventually be a public offering, a sale of stock that he envisions as possibly “the world’s biggest cowshare.” He also sees it “as a way to energize and push the vision of true health forward in a time when this kind of vision is oppressed.

While it’s important to remember that no deal has happened yet, the fact that serious investors are sniffing around in the raw milk arena is significant. I wish there were a pastured-raw-milk commodity market I could invest in.

Leave a Reply

17 Comments on "A Peek Into the Future of Raw Milk: The Worlds Biggest Cowshare?"

Notify of

Sort by:   newest | oldest | most voted
September 27, 2007 10:02 am

Does that mean OP will become like the nasty feedlot dairies? That would be a major concern for me. It seems when companies get "big" they lose thier quality.

Don Neeper
September 27, 2007 7:41 pm

As long as Mark McAfee retains a majority of any stock issuance and full operational control of the company I wouldn’t worry about any sacrifice of profits over quality. However, it is a valid concern if his control is diluted to the point where the board of directors can dictate changes in operations or replace him as CEO.

On another matter and speaking of OP, the ever-vigilant Kentucky Department for Public Health just yesterday issued a hyper-ventilating press release warning its citizens of the possible L. monocytogenes contaminated OP cream just in case anyone happened to hop a plane to… Read more »

September 27, 2007 8:17 pm

I find the fact that Mark McAfee is considering partnering with an investment firm, in order to "grow Organic Pastures much more quickly than it might otherwise", a bit unsettling. Once upon a time small family dairy farms went organic in order to capture a higher percentage of the market dollar, and they have been overrun by ‘corporate farms’ that intentionally sacrifice quality for quantity (i.e. more money). The fact that Charlesbank, an investment firm, owns the majority stock in Aurora Dairy, which was recently found to be in ‘willful violation’ of USDA organic standards, attests to… Read more »

Don Neeper
September 27, 2007 8:59 pm

Cheryl and Sylvia raise very valid points on the dangers of Mark’s company growing too large and becoming beholden to outside investors who only care about his profit margins and the return on their investment. However, wouldn’t it be nice to have a successful, large, politically and economically powerful company espousing the benefits and safety of raw milk from grass-fed cows? If Mark can thread the needle by growing his company while maintaining his commitment to safety and quality then he could very well pave the way for relaxing or over-turning the laws against raw milk sales in other… Read more »

September 27, 2007 9:39 pm

I understand your argument that "wouldn’t it be nice to have a successful, large, politically and economically powerful company espousing the benefits and safety of raw milk from grass-fed cows? If Mark can thread the needle by growing his company while maintaining his commitment to safety and quality then he could very well pave the way for relaxing or over-turning the laws against raw milk sales in other states." However, I’m not convinced this would really work. Most companies that maintain a high degree of integrity remain small and family-owned. Can you name ANY company that has… Read more »

Don Neeper
September 27, 2007 10:34 pm

I actually agree more than I disagree with Cheryl’s points, and I can’t honestly think of any company that even started with Mark’s degree of integrity and commitment to quality let alone kept them after accepting outside investment. :-) But I can also understand Mark’s dilemma and his desire to continue to serve his customers while growing to a size that makes him better able to stare down regulators and keep control of his own destiny.

I don’t really know that morphing OP into an umbrella organization as in Organic Valley would really work since Mark’s commitment to quality might… Read more »

Steve Bemis
September 27, 2007 11:42 pm

I don’t know if it ever happened, but there was talk about grass-fed raw milk product being pooled from Wisconsin in bulk, shipping it refrigerated to California, then bottling and selling in California. I think that avoids the FDA interstate rule, and gets the milk from a place where it is perfectly legal to produce, to a place where it is perfectly legal to sell. I mention this simply as another spin on the current situation – which could (if it’s happening) be having an impact on the competitive picture in California that Mark is facing. … Read more »

September 28, 2007 1:21 am

I haven’t kept up much with the Ben & Jerry’s ice cream company since I started making my own ice cream in an effort to my reduce sugar consumption, but even with the company’s acquisition by Unilever a few years ago, that company seems to have been able to expand and still remain true to its founding principles (unless there’s a dirty B & J secret that I haven’t heard about :-). Ben & Jerry’s is even international now.


September 28, 2007 1:47 am

As a California resident, I would welcome some competition in the CA raw milk market. But I’m not so sure I would buy raw milk from Wisconsin, not that I have anything against the good people and cows of WI. But they should cultivate and serve their market opportunities closer to home, IMO.

I think dairy should be as local as possible, for lots of reasons. In fact, it already bugs me that I am buying OPDC milk from so far away (100s of miles). I’s much rather my milk money went to… Read more »

September 28, 2007 3:28 am

While this revelation is not unexpected it is a little unsettling. Popularity of demand, and the allure for tremendous profit, has contaminated many a good market.just ask the folks that grew (or certified) organically 10 years ago.

Making raw milk available to the most people possible is sure a commendable thing, but I have my reservations that we need to employ the massive herd, bulk tank methodology to serve the demand.

The social change that can accompany the raw milk movement will be depreciated if we rely on the 100 cow dairies to supply the market. It would be better to… Read more »

Dave Milano
September 28, 2007 10:02 am

The model–THE model–for food production is LOCAL. For all the reasons, go to:


…and in addition to all that, consider this:

Those who think bigger is better because they like Mark’s energy and commitment to quality and want more of it, should realize that more growth means more distance between Mark and his end product. Public ownership will also work to dilute his influence, by creating a group of stakeholders that have basically purchased the right to throw their weight onto the business’s decision-making scales. That’s the short run picture. The long-term could be downright bleak, because public ownership… Read more »

September 28, 2007 8:05 pm


Ben & Jerry’s post-Unilever has reneged on many of the original owners’ commitments. Some of these included contracts with sustainable and social just suppliers, and a limit on the ratio of compensation for the highest vs. lowest paid employee.

Joel Noble
September 28, 2007 10:53 pm

I find this idea of expansion a poor idea at best and a disaster waiting to happen. This can only lead to stiff controls and tougher anti raw milk laws.

Recently I have noticed in chain supermarkets they are selling
cheese advertised as ‘Farmers Market Cheese". This cheese is mass produced and never came anywhere near a farmers market. The big companies see the movement to local slow foods and will capitalize on the advertising to fool the public. Soon the LOCAL label will mean little.

Why O.P. thinks they have to become the General Motors of raw milk is beond me.

Michael J. "Mickey" Richard
September 28, 2007 11:19 pm

I think any corporate involvement in the local food market (although OP can’t really be considered a local vendor) to be very disturbing. Just like the Organic Food Act has been rendered useless by corporate interference (and regulators rolling over and playing dead), so will any attempt to take over local producers, the same as the small organic producers that are being bought up by the agricorps.The only real hope is in cooperatives organizing and linking up with each other.

On a humorous note:

When I picked up my milk and eggs this morning, from Richard Hebron, he showed me a… Read more »

September 28, 2007 11:28 pm

Dave, good to know about the B & J changes. I didn’t think I would find anything un-rosy on the B& J website of course, but I’ve been out of the commercial ice cream loop for a while and I hadn’t seen any negative news after Unilever took the helm. I’ll look into this further. My consumer skeptic cap is back on now, thanks.

Joel, "local" is already meaningless. In my area, we had a small local family grocery store chain, initially called Boney’s, then called Henry’s when the family company divided, and finally renamed… Read more »

September 30, 2007 5:33 am

According to the local (Ann Arbor) paper this morning, the Michigan Department of Agriculture is shut down until Michigan agrees on a budget.
If they don’t meet the deadline tomorrow night (Sept. 31), MDA is included in the report: "35,000 state workers get orders to stay home"

A bizarre twist – make of it what you will.
But certainly it makes it harder to justify the expense of tracking down and harassing small farmers.

Of course the tragedy is the educational, appeals court, police protection, and natural areas that will also be lacking state workers.