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rBGH Analysis by Rick North

Milkweed rBGH Analysis – Rick North

April 4, 2010


How widespread is rBGH (rBST) use?

 Elanco, Posilac’s® manufacturer, won’t say. Like Monsanto, its predecessor, it carefully guards any information regarding sales. Spokesman Dennis Erpelding, in a recent article in Dairy Today, would only say that “it’s doing well.” However, based on recent studies and events, that statement is more corporate spin than accurate assessment.  In the past six years, there has been a significant decline in rBGH use, spurred by farmer  dissatisfaction with the hormone and increasing consumer demand for rBGH-free products. Taking all public data into account, Oregon Physicians for Social Responsibility’s current estimate is that only 9-12% of dairy operations are still using the hormone on 10-14% of the nation’s cows. What the USDA SaysIn 2002, the USDA’s national dairy survey estimated that 15.2% of herds were using rBGH, with 22.3% of cows injected. Among herds of 500 or more cows, it was used in 54.4%, while it decreased to 32.2% in medium-sized herds and only 8.8% in herds of fewer than 100 cows. It was used more in the West than in the Midwest, Northeast and Southeast, reflecting larger herd sizes there. By 2007, the USDA estimates showed just how much rBGH sales had eroded. The percent of herds using the drug remained the same at 15.2%, but the percent of cows being injected dropped to 17.2%, a major 22.8% decrease. Use in the largest herds dropped to 42.7%, 28.8% in medium herds and remained about the same at 9.1% in the smallest herds. The study didn’t break down use by geographical area. What the Academic Studies SayThe most recent academic statistics on rBGH use were compiled by Henry An, an assistant professor in the Department of Rural Economy at the University of Alberta, and formerly at the University of California-Davis.  He co-authored a paper with Leslie Butler at UC-Davis on rBGH adoption and disadoption rates in California taken from a spring 2008 survey reviewing statistics from 243 dairy operations, about 18% of the California total. An, who has been studying rBGH usage for over a decade, found that it had declined from 31% of dairy operations in 2001 to only 18%. Although his sample size was limited, the figures were similar to larger national surveys. Fully 35% of producers who had tried rBGH had stopped using it. This was consistent with a 2002 review done by Bradford Barham and Jeremy Foltz that found that 25-40% of producers using rBGH had given it up. An and Butler’s findings on why farmers had stopped using rBGH were especially revealing. The percentages of respondents who cited the following reasons as “very important” in their decisions to disadopt are shown below. They could name more than one reason:  Public opinion                                      26%No yield gain                                        24%Low milk prices                                    24%Oversupply                                           23%High rBGH price                                   21%High management and labor costs  18%High veterinary costs                          15% The above results mirrored the 2002 USDA report findings that “cost and animal health were major concerns specifically identified in all regions” as reasons that farmers had stopped using the drug.  Numerous agricultural economic studies have confirmed that there is no guarantee that rBGH use increases profits, including Tauer/Knoblauch in 1998, Foltz/Chang in 2002 and McBride et al in 2004. An and Butler concluded that: “Our main result is that rbST use in California is on the decline. The confluence of low profitability, increasing consumer backlash, and a shifting of demand toward more natural milk has led many dairy producers to conclude that rbST is not an effective technology.” What the Accountants SayGenske, Mulder & Co. is one of the country’s leading accounting firms for dairy operations, handling the books of processors producing 10% of the nation’s milk in 29 states. In a February 10, 2010 presentation for the American Dairy Products Institute, CPA Gary Genske produced hard numbers from his clients showing just how far and fast rBGH is falling. Based on the average herd size of his clients in 2008 at 1,963 cows, the actual expenses for rBGH equated to only 66 cows per day, a mere 3.4% of the total herd.  By 2009, this dropped to only 58 cows per day. For 2010, he estimated total costs of rBGH even lower, an even more dismal projection for Elanco. Referring to limited profitability and the growing nationwide consumer preference for rBGH-free products, Genske affirmed that “There’s no question that it (rBGH) is almost completely obsolete for our clients.” Genske, who also has his own farms, formerly used rBGH but has discontinued it. Are Farmers Telling the Truth?The question of cheating invariably comes up – are the farmers who say they’re rBGH-free telling the truth? No groups of people – doctors, lawyers, Wall Street executives, and yes, non-profit managers - are 100% truthful, and dairy farmers are no exception. While there is cheating, it’s doubtful that it’s widespread, based on a number of factors. First, a significant majority of farmers never used rBGH in the first place and many have stopped using it for the reasons cited above. They have no reason to lie, since they simply don’t want the drug, regardless of their processor’s policy. Second, some processors pay a premium to farmers for not using rBGH, providing a financial incentive.  Third, the industry standard for declaring a company rBGH-free is a written affidavit, a legal document. Several social scientific studies have shown that when people sign their name on an agreement, they usually keep their word. Finally, most dairy farmers are honest, and most don’t want to risk losing the respect of their peers who are telling the truth and of their families.   Retailers and Processors Saying No to rBGHThe groundswell of consumer opposition to rBGH that began in earnest in 2004 has continued. In 2008, the two largest food retailers in the country, Wal-Mart and Kroger, both went rBGH-free for their private label fluid milk, although their other dairy products still allow the hormone. There was some confusion created by an article in the Idaho Dairymen’s Association newsletter and reprinted elsewhere that gave the impression Wal-Mart was accepting rBGH milk for all their dairy products. Their consumer affairs department confirmed in an e-mail that their fluid milk will stay rBGH-free: “Wal-Mart has made the decision to convert to rBST free milk to address growing consumer concerns and competitor claims.” In 2009, three of the largest dairy processors in the country went totally rBGH-free. In April, Glanbia Foods, #21, a major cheese manufacturer, made the switch. In August, Yoplait, #23, announced its conversion, and in December, Dannon, #26, followed suit. Yoplait and Dannon, the two largest U.S. yogurt companies, sell approximately two thirds of all yogurt in the country. Combined with numerous other national and regional yogurt companies that had already gone rBGH-free, such as Brown Cow, Cascade Fresh, Nancy’s, Stonyfield Farm, Wallaby and Yami, it’s now estimated that at least 75-80% of all yogurt sold in the country disallows the hormone. The rBGH-free trend is quite clear. More and more consumers won’t risk their health with rBGH and more and more processors and retailers won’t risk their profits by ignoring their consumers’ wishes. 
Rick North is the Project Director of Oregon Physicians for Social Responsibility’s Campaign For Safe Food (www.oregonpsr.org). For nearly seven years, he has led a campaign educating the public on the animal and human health risks of rBGH. He welcomes questions and comments and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. or 503-968-1520.