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Red Barn's Domestic Fair Trade Model

Red Barn's unique domestic fair trade model rewards excellence and helps keep small family farms viable business models. Farmers are paid a steady base price that eliminates drastic pricing downturns that can mean the end of a small family farm. Red Barn farmers can earn more than the steady base pay by meeting and exceeding standards of animal health/welfare and milk quality. Excellence rather than efficiency is always the primary incentive. 

Pay Chart Commodity v RB Target for mark


Commodity Market: Because milk is a commodity, dairy farmers don’t have a say in the price they get for their milk; they take what the commodity market gives them. In recent years, the commodity price per 100 lbs of milk has fluctuated between highs of over $24 to as low as $12. The drastic downturns in prices often cause the demise of small family farms, especially as operating costs continue to increase.

The commodity market incentivizes efficiency only. While efficiency can be a good thing, for the dairy industry it means trying to push a little more milk production out of each cow or farm for a little bit cheaper. After many decades, it becomes a race to the bottom. In a commodity environment, farms are most likely to survive if they expand and consolidate. This explains why nationally, the number of dairy farms continues to decrease while the number of cows increases. Since 1970, the number of American dairy farms has dropped more than 93%. We believe an unintentional result can be compromises in animal welfare and an industrialized view of cows that relegates them to the status of a production widget.

Red Barn Domestic Fair Trade Model: Red Barn’s innovative pay scale for our farms is independent of the commodity market. Rather than incentivizing efficiency, our pay scale rewards excellence in humane animal care, animal health and milk quality. For milk made into Red Barn cheese, our farms receive a consistent price of over $20 per 100 lbs. We work hard to grow Red Barn sales of cheese so they can count on consistent, sustainable Red Barn pricing instead of having to rely on the commodity market. 

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