For four years, Milkhouse Dairy Farm and Creamery in Monmouth, Maine, supplied grass-fed organic milk to Horizon.

That was until Horizon told the farm’s owners, Caitlin Frame and Andy Smith, their contract would end in six months. Horizon said it was because Milkhouse was selling some of its milk direct to consumers and retail stores, and also using some of it to make and sell yogurt.

Horizon (owned by international food conglomerate, Danone) said it didn’t like that the farm was “diverting” some of its supply, instead of selling exclusively to Horizon.

In a video about Milkhouse Farm, produced by the Real Organic Project, Caitlin said that all-or-nothing policies like the one Horizon insists on takes the “independent” out of independently owned farms. Farmers lose their sense of ownership over their own farm and what they produce. For instance, a farmer can’t decide to sell 50 – 100 gallons of their milk to a local cheesemaker without fear of losing a big contract.

Caitlin and Andy were fortunate, in that they have their own on-farm milk processing. But the other five or six small Maine dairy farms dumped around the same time by Horizon didn’t. Andy told us that he suspects the real reason Horizon dropped their farm, and the others, is that the Horizon just didn’t want to deal with smaller milk suppliers.

In recent years, the organic dairy industry has been adopting the “bigger is better” model of non-organic dairy—a model that’s better for Big Brands, but not for smaller family-owned dairies. (They’re dropping like flies).

That model isn’t good for consumers, either. As the Washington Post reported last year, consolidation in the organic dairy industry has created a situation where consumers can no longer trust that milk advertised as organic even meets USDA organic standards, much less matches the quality of milk produced on farms like Milkhouse, which follow and/or exceed organic standards.

Smith told us in an interview that there’s no way a dairy farm with 5,000 – 10,000 cows is following the USDA Organic access to pasture rules which require animals to have a minimum of 120 days on pasture. They’re also not following the rules for transitioning calves to organic milk production. (For more on these rules and how they’re being skirted by large milk producers, read this article in the latest issue of “Organic Insider”).

By gaming the system, big organic milk brands can sell their products for less. Brands like Aurora and Horizon also supply the milk for store brands, such as those sold in Walmart, Costco and major retail chains. For a list of organic brands sold locally and regionally by authentic organic producers, check out the Cornucopia Organic Dairy Scorecard.

As with other agricultural sectors, smaller organic regenerative producers suffer under agricultural policies written by corporate agribusiness lobbyists who make sure the deck is stacked in their favor. The Green New Deal could help farms like Milkhouse, if it includes policies that reward farmers who use practices that lead to carbon drawdown and sequestration.

In the meantime, farmers like Caitlin and Andy are at a competitive disadvantage. With a farm their size, “We have no economy of scale,” Andy said. “Our products always end up costing more on the shelf.”

New England farmers don’t have access to the large tracts of land that exist in western states. But even if they did, Andy said they aren’t interested in scaling up. Fortunately, they are set up for on-farm processing. But that’s not feasible for most small farms, according to Andy, because of the cost, and because managing a milk processing operation requires a specific skill set that isn’t easy to come by.

“Lack of infrastructure is a huge problem, a huge bottleneck” for small dairy farms in Maine, Andy said. He said he and other small dairy farmers are working on several projects, including trying to create a shared brand, and trying to get an in-state milk processor. Right now, he said, most small organic dairies are limited to shipping their milk to Stonyfield, in New Hampshire, or Horizon, in western New York.

Milkhouse also raises pasture-based laying hens and pigs. The farm practices rotational grazing. In the video, Caitlin says pasture is the key “We grow grass, the cows make milk out of that grass and the milk feeds people. It’s magic making.”

Katherine Paul is associate director of the Organic Consumers Association (OCA). To keep up with OCA news and alerts, sign up for our newsletter.