ANSWERED: How Does a Herdshare Program Work? + Pros and Cons

More consumers than ever want high-quality meat, dairy products, and produce. They want to know where their food comes from, who produces it, and how fresh it is.

If you specialize in dairy, you might consider launching a herdshare program to capitalize on this growing trend. Herdshare programs cut out the middleman and give your customers a direct line to your milk products.

But are they the best way to go?

This article covers everything you need to know about herdshare programs, including their pros and cons and alternative direct-to-consumer subscription programs. 

How Does a Herdshare Program Work?

Put simply, a herdshare program is like partially adopting a portion of a herd of cows. 

Members of the program own a portion of the herd or pay a fee to cover the care and boarding of the animals in return for a share of the milk and other dairy products produced by the herd. Fees cover things like feed, veterinary care, milking equipment, and the farmer's time and labor.

Unlike milk they would buy at the grocery store, your customers get raw, unpasteurized milk straight from the source. For some people, raw milk tastes fresher and aligns with their values.

Herdshare programs offer unique benefits and disadvantages. Let’s explore how they work and their pros and cons for your farm-to-fork business.

Note: While some herdshare programs also sell meat and offal products, raw milk is the most popular product.

What Are the Benefits of Herdshare Programs?

For consumers and farmers, the benefits of a herdshare program are clear:

• Raw milk is milk that hasn't been pasteurized or homogenized, meaning it retains all of its natural enzymes, beneficial bacteria, and nutrients. Health-conscious consumers believe raw milk has health benefits that are lost during the pasteurization process.
• Consumers can support local farmers and sustainable farming practices. For local farms struggling to compete with industrial diaries, it’s a way to connect directly with customers.
• Many herdshare farmers practice sustainable and ethical farming, such as pasture-raising their cows and avoiding the use of artificial hormones and antibiotics. By supporting these farmers, herdshare program members feel good about where their food comes from.

Potential health benefits and sustainability are top of mind for consumers of raw milk products. For farmers, connecting directly with consumers is a major draw — but do the benefits outweigh the disadvantages?

What Are the Disadvantages of Herdshare Programs?

While there are significant benefits to participating in herdshare programs, there are also drawbacks — particularly for farmers. It’s worth asking yourself these questions:

• Is it legal? According to the Weston A. Price Foundation, the legalities surrounding raw milk sales vary across the U.S. For example, in Alaska, the sale of raw milk and other products is legal. Sales at retail stores are also legal if the producer meets regulatory requirements. To see if raw milk sales are legal in your state (and to what extent), use this map.

• Are you liable? Raw milk can contain harmful bacteria, creating a risk of foodborne illnesses when it isn’t handled properly. If a herdshare member gets sick, you could be held liable. Ensure you carry extra liability insurance and are extra vigilant about milk-handling practices.

• Is it profitable? Herdshare programs are usually small operations. There’s often a cap on how much milk you can sell and how much income you can generate. You may need to supplement your herdshare program with sales of eggs or meat to make ends meet.

• How much say do program members have? Herdshare members are more like partners than customers — managing their expectations can be difficult. For example, they might have strong feelings about milk quality, distribution schedules, or animal care practices.

• Can you afford legal issues? If herdshare members feel like you aren’t holding up your end of the bargain, they may take legal action. Remember, herdshare agreements are contracts. Legal battles are costly and time-consuming.

Herdshare programs can be rewarding for small farmers, but there are risks and challenges involved. Let’s look at some alternatives to herdshare programs.

Related Read: How To Manage a Family Farm: 5 Essential Tips

Alternatives to Herdshare Programs for Direct-to-Consumer Sales

There are various alternatives to herdshare programs that may be more straightforward and less legally complex.

For example, you could sell pasteurized milk and dairy products instead of raw milk. You can ensure a safer product and still sell directly to consumers. Many states are more lenient and have fewer regulations around pasteurized milk.

Another alternative is to take your products to community-supported agriculture (CSA) programs. CSA programs let customers pay upfront for a share of a farm's harvest, which can include dairy products.

Another route to consider is producing value-added dairy products. By developing products like cheese, yogurt, and ice cream, you can increase revenue and appeal to a wider customer base.

The last two alternatives involve getting your dairy products into your customers’ hands via home delivery or providing quality products to grocery and other retail stores. Let’s examine these options in more detail.

From Your Farm to Their Table

You can get your products into grocery stores by partnering with processors, distributors, and retailers. Here’s a simple breakdown of the process:

• Your dairy farm produces and stores milk. You keep it cool until milk trucks collect it.
• Milk trucks collect and transport your milk to processing plants.
• The milk is tested for quality, pasteurized, and processed into various dairy products such as fluid milk, cheese, yogurt, and butter.
• The processed dairy products are packaged into consumer-friendly sizes and labeled with the processor's brand.
• The products are distributed to grocery stores and other retailers via refrigerated trucks.

For small dairy farms, it makes sense to work with a dairy processor or cooperative that can handle the processing, packaging, and distribution on your behalf.

Related Resource: Perishable Shipping Course

You might also choose to sell your products at farmers markets. At farmers markets, you can sell your products face-to-face and build relationships with customers.

These alternatives to herdshare programs are simpler, easier to scale, and more profitable.

Last but Not Least: E-Commerce and Home Delivery

You now know how a herdshare program works, what its benefits and drawbacks are, and the many alternatives you can explore. However, one option stands out: a subscription service.

GrazeCart helps dairy and meat farmers provide convenient subscriptions to customers. Farmers can use GrazeCart software to build an e-commerce store and integrate a subscription platform. Features include:

• Modules to offer incentives that boost average order values
• A customer portal so consumers can manage and update their subscriptions
• Email and SMS modules to send customers order updates
• Inventory tools to set thresholds and prioritize subscriptions 

…and more. Delivering raw or fresh milk directly to customers has never been easier. 

Instead of complicated herdshare programs, check out our on-demand demo video and book a free discovery call to see how a subscription model can take your farm-to-fork operation to the next level.