Late, incomplete payment of producers remains under PMB scrutiny

HARRISBURG, Pa. — Harrisburg Dairies has issued termination notices to seven dairy farms in Lebanon County. The Pennsylvania Milk Board (PMB) approved the company’s petition for a shortened 28-day notice period, which began July 11, citing the sudden and total loss of a contract with Whole Foods Market — averaging 229,116 pounds of milk per week — as the basis for the request. The seven affected farms together ship a similar volume of 237,650 pounds weekly.

In 2022, PMB adopted regulations requiring milk dealers to provide at least 90 days’ written notice to raw milk suppliers for termination of contracts or to discontinue normal course of purchase, unless specific criteria justify a shorter timeline.

According to PMB’s July 11 memo, Harrisburg Dairies met those criteria for the current terminations, citing the unexpected nature of the Whole Foods loss and the inability to replace that volume. Whole Foods has been owned by Amazon since 2017.

“This is not a blanket approval—it applies only to this particular volume loss,” said Doug Eberly, PMB chief counsel, in a July 22 interview.

“They lost a big customer. There wasn’t much we could do but give them the 28 days. We also made sure someone could take the milk from those farms,” added Rob Barley, PMB chairman.

In 2021, Harrisburg Dairies terminated agreements with seven farms in a different county.

In 2018, Harrisburg Dairies had taken on nine Lebanon County producers after the former Dean Foods dropped their contracts. Dean filed for bankruptcy protection a year later, and its assets were largely acquired by Dairy Farmers of America.

Ongoing payment concerns

Separately, Harrisburg Dairies remains under scrutiny for late or incomplete payments to producers. In September 2023, the PMB ordered the company to pay its raw milk suppliers weekly after repeated citations — a requirement still in effect.

At its May 2025 Sunshine Meeting, the Board reviewed legal docket CE-25-004, citing evidence from a March 12 hearing alleging Harrisburg Dairies failed to comply with the terms of the stipulated agreement by failing to make weekly payments and provide the required documentation. Evidence was presented that these issues with the stipulated agreement date back to at least December 2024.

While the Board found grounds to revoke the company’s milk dealer license, it ruled on May 7 that doing so would not serve the best interests of the Pennsylvania dairy industry.

Instead, Harrisburg Dairies must now increase its financial security and make weekly Wednesday payments equal to at least 110% of the previous month’s lowest class price until accounts are current — while also meeting all federal and state deadlines for final monthly payments.

Some producers, speaking anonymously with Farmshine, reported receiving partial payment slips weekly, with corresponding deposits delayed by three to four weeks.

Eberly confirmed the PMB staff continues monitoring and does not close cases until producers are fully paid.

Harrisburg Dairies did not immediately respond to requests for comment, although a late email indicated further details may be shared soon. Stay tuned.