HB 16-LOCAL FOOD PROCUREMENT; LABELING  2:08:59 PM CO-CHAIR TARR announced the final order of business would be HOUSE BILL NO. 16, "An Act relating to the Alaska Food, Drug, and Cosmetic Act; and relating to the sale of milk, milk products, raw milk, and raw milk products." [Before the committee was the sponsor substitute (SS) for HB 16, introduced and referred to the House Resources Standing Committee on 3/20/19.] 2:09:42 PM CO-CHAIR TARR opened public testimony. 2:10:01 PM ART GRISWOLD, Golden Heart Dairies, said his two sons have a raw milk dairy that distributes in the Fairbanks area over one-half ton per week. Mr. Griswold expressed his support for the bill which clarifies membership and herd-share programs. Golden Heart Dairies has approximately 30 head [of cows] and seeks to expand to a 100-head dairy with a Grade A program. He said financing is difficult for the dairy industry and urged the committee to support "the program." REPRESENTATIVE RAUSCHER asked for the location of [Golden Heart Dairies]. MR. GRISWOLD said Delta Junction. REPRESENTATIVE HANNAN asked for a description of a Grade A dairy program. MR. GRISWOLD said to become a Grade A dairy Golden Heart Dairies would have to construct a creamery and have Grade A inspections made on the barns and the dairy. In further response to Representative Hannan, he said the dairy would still sell raw milk, but to enter the Grade A dairy and retail market, the dairy needs a pasteurization plant. CO-CHAIR TARR inquired as to the amount of investment needed for the growth of the dairy. MR. GRISWOLD said the creamery equipment costs $700,000; the barns and the new creamery will cost $1.4 million. Financing is difficult although a portion could be federal loan programs. REPRESENTATIVE TUCK asked how a creamery would affect the production of the dairy. MR. GRISWOLD advised the investment in a creamery would triple the dairy's output of milk. 2:16:53 PM JOHN ANDERSON disclosed he is a member of the Board of Agriculture and Conservation, Division of Agriculture, DNR, and was speaking on his own behalf in support of the bill. Mr. Anderson said the bill would solidify the market for raw milk products thereby helping producers in the state and keeping hundreds of thousands of dollars in Alaska. For example, farmers spend thousands of dollars on feed and supply. He cautioned about other issues such as "the M.ovi issue" and [the lack of] access to farm insurance. REPRESENTATIVE HANNAN asked whether Mr. Anderson carries farm insurance for his products. MR. ANDERSON said no. Country Financial is the only farm insurance company in Alaska and if one sells raw milk products it will not issue insurance. REPRESENTATIVE HANNAN surmised farm insurance is limited because raw milk is available through herd sharing. She clarified her question: Maybe you could help [explain the problem] by just expanding on what the need for increased farm insurance coverage is for. MR. ANDERSON explained when farmers sell products at a farmers market, the farmers market venue requires liability insurance. CO-CHAIR TARR added the bill has a very limited scope and does not relate to retail or farmers market sales. 2:22:54 PM REPRESENTATIVE SPOHNHOLZ concluded the bill would not allow sales at farmers markets; however, a farmer could market a cow share program. CO-CHAIR TARR stated a farmer can provide information about a herd share program, but no sales are allowed at farmers' markets. 2:23:45 PM AMY SEITZ, Executive Director, Alaska Farm Bureau, Inc., informed the committee the Alaska Farm Bureau promotes expanding economic opportunities for farmers and ranchers in Alaska. In Alaska, 95 percent of purchased food is imported, and it is important to foster continued growth in agriculture. The proposed bill takes steps, such as security for herd share programs by allowing access to expanded products, improved food security, and keeping food dollars in the state. Ms. Seitz urged the committee to support passage of the bill. 2:25:16 PM SUZY CROSBY, spokesperson, Cottonwood Creek Farm, expressed her support for HB 16. She said the bill would protect "herd share" from changes made by a state official, and includes the sale of value-added products in the definition of herd share. She referred to a legal opinion that if a person has a right to drink raw milk, they have the right to have the milk made into products. Also, there are three benefits to broadening the term herd share to include value-added products: producers can utilize a surplus of milk by making chevre; consumers have more locally made products available; the state's "closed loop scenario" between producer and consumer remains intact. 2:29:31 PM COURTNEY MUNSON said she consumes raw milk and participates in a herd share program. She expressed her support for the bill because raw milk and raw milk products are important for the health of her family. In addition, the bill supports local food security, the food economy, and a close connection with the food supply. 2:32:05 PM LESLIE TOMPKINS said she has members in a herd share of goats and cows. She expressed support of the "new language" in the bill and of previous testimony related to value-added products. 2:33:41 PM GIANA THOMAS said she is in support of HB 16. As a herd share owner, the bill recognizes her rights, and also helps support food security. Alaska has only one public dairy and if there are no longer third-party inspections, all dairies will herd share. Ms. Thomas explained why pasteurization is necessary for very large dairies; however, small farm dairies know their animals and procedures. Ms. Thomas further explained she has a goat herd and seeks to offer a herd share in sheep; however, sheep are seasonal milkers and to offer a year-around herd share, she needs to include sheep cheese. She pointed out sheep milk and sheep cheese would be a valuable niche market for Alaska. REPRESENTATIVE RAUSCHER asked for the price of a gallon of raw milk. MS. THOMAS said the true cost is approximately $10 per gallon. In further response to Representative Rauscher, she explained she has a one-seventh share and picks up one gallon per week from a goat that weighs approximately 150 pounds; a cow would give 8-10 gallons per day depending on the feed and the cow's condition. The number of shares depends on how one manages the milk and milk products, and she provided examples. 2:40:55 PM CANDY BATES said she is in support of the bill. She said she has a calf operation and has dairy cows. She said she has concerns about insurance and need the support of the legislature to grow agriculture and livestock [industries] in the state. REPRESENTATIVE HANNAN asked Ms. Bates for the number of her shareholders and how many cows are milked. MS. BATES said she has a feedstock operation that breeds cows and has 35 milk cows. Her farm produces cows to sell to local homesteaders for hand-milking by their owners. REPRESENTATIVE HANNAN questioned whether some farms have meat shares. MS. BATES said others do, but she sells beef by a quarter or one-half. Her involvement with milk cows is to produce better genetics for the cows in Alaska. In response to Representative Rauscher, she said a milk cow costs $2,500-$3,500. 2:45:08 PM PETE KENNEDY, attorney, Weston A. Price Foundation, said he agreed with testimony from Ms. Crosby related to the benefits to the state: more food dollars in the state from value-added products and more opportunities for farmers. He noted value- added products have a better safety record than does fluid milk. REPRESENTATIVE HANNAN asked Dr. Gerlach how many herd shares operate in the state. 2:47:14 PM ROBERT GERLACH, VMD, State Veterinarian, Office of the State Veterinarian, Division of Environmental Health, Department of Environmental Conservation, informed the committee the Office of State Veterinarian does not keep a record of the number of herd share operators or of the number of farms in the state. He has heard there may be one or two dozen in the Matanuska-Susitna valley and more in the Interior. REPRESENTATIVE HANNAN questioned whether Alaska has only one commercial dairy licensed to sell retail products. DR. GERLACH said correct. Havemeister Dairy has a permit for a dairy farm and for a pasteurization plant; another facility has a permit to supply blow molding milk containers for the dairy. REPRESENTATIVE HANNAN inquired as to how to bring the state's raw milk and cheese into full commercial retail operations across Alaska. DR. GERLACH advised current state regulations prohibit the distribution or sale of raw milk to consumers. State regulations do not prohibit an individual from consuming raw milk, or from consuming raw milk acquired by owning a portion of an animal through a "share operation." Dr. Gerlach pointed out 18 AAC 32.010 allows the consumption of raw milk by the owner of an animal for that person's personal use, but does not permit the processing of that milk into products for distribution to owners. REPRESENTATIVE RAUSCHER asked for the precautions that are necessary related to raw milk. DR. GERLACH said raw milk is considered a high-risk product for foodborne pathogens for two reasons: cattle and goats can shed pathogens directly into the milk and the environment where the milk is harvested, and where the animal lives, can contribute to pathogens being transferred into the milk. He said national studies have found 12 percent of milk collected from Grade A dairies and raw milk dairies contain pathogenic bacteria. The state milk program inspects farms to ensure animals are healthy and monitors the transfer of milk to the processing plant; if the raw milk has a higher bacterial count the milk is not processed. In addition, the state lab tests for the presence of adulterants such as antibiotics. MS. THOMAS corrected her previous testimony that the cost of milk [from her herd share] is $10 per half gallon. 2:54:57 PM CO-CHAIR TARR, after ascertaining no one further wished to testify, closed public testimony on HB 16. She noted the bill will create small business opportunities for farms and dairies and freedom for consumers; her personal experience is that the [herd share] animals are well cared for. REPRESENTATIVE HANNAN observed there were dairies in Anchorage and Southeast Alaska not so long ago; she expressed her support for the expansion of the dairy and agricultural industries whenever possible. 2:59:46 PM REPRESENTATIVE TALERICO moved to report SSHB 16, Version 31- LS0215\U, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, SSHB 16 was reported from the House Resources Standing Committee.