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The team at Planet Money dives into the milk industry of Montana

LEILA FADEL, HOST:

Two hundred twenty-six billion pounds of milk were produced in the U.S. last year. And out of all that milk, the state of Montana says it has the freshest in the country. It is so serious about that statement, in fact, that Montana forces stores to take milk off their shelves a lot earlier than other states. Sarah Gonzalez with our Planet Money podcast reports the rule has created a protective milk bubble around Montana.

SARAH GONZALEZ, BYLINE: Milk in Montana has to be sold within 12 days of pasteurization.

UNIDENTIFIED PERSON: Customer service on four, please. Customer service on four.

GONZALEZ: The industry standard for milk is 21 to 24 days.

CORY THOMPSON: So those are all good. Can you just check on those?

GONZALEZ: Cory Thompson is checking if any of the milk in his Montana grocery store has reached its 12-day sell-by date.

THOMPSON: These are dated. It's today, right? Yeah.

GONZALEZ: It's today.

THOMPSON: So we should pull those.

GONZALEZ: He pulls all the dated cartons and walks to the back where the mops are.

THOMPSON: We just throw them right in the garbage can. Like, literally just - that's it.

GONZALEZ: Just the whole, full, unopened cartons straight into the garbage.

Oh. Like, does it hurt you, like, a little bit?

THOMPSON: Well, it sucks, but.

GONZALEZ: But you can't sell it.

THOMPSON: Right.

GONZALEZ: Like, you're not allowed to sell it.

THOMPSON: Right.

GONZALEZ: OK. If these exact milk cartons, same brand and everything, were sold just next door in Idaho, they would not have to go in the trash yet. They could stay on the shelf for nine more days - in Oregon for 11 more days - because this is not bad milk, not even close.

Can I just taste it?

THOMPSON: Yeah.

GONZALEZ: All right. I'm just going to pull it out of the garbage here. I mean, it's, like, perfectly fine milk.

THOMPSON: Right.

GONZALEZ: The pasteurization science is the same, but food date rules are just different state to state. In Montana, the Department of Livestock is in charge of the 12-day sell-by rule.

MIKE HONEYCUTT: Now, I mean, the intent of this is about freshness and quality for the consumer.

GONZALEZ: Mike Honeycutt is with the department. And he says this rule protects very rural consumers - those that go to the grocery store once a month. Because if the shelf life for milk in a store is short, then customers can keep milk in their fridge at home for longer. And he says, if stores just stocked their shelves wisely, they can avoid wasting perfectly good milk because of this rule.

HONEYCUTT: Most of our retailers in the state do a very good job with buying and inventory control to avoid having large amounts of milk that ends up having to be thrown away.

GONZALEZ: So he says this is good for consumers. But you know who this is all really, really good for? Milk makers in the state. This rule makes everyone buy more milk more often. There are two big dairy processors in Montana and 45-ish pretty small dairy farms, and this rule kind of shuts out competition. Milk makers from outside the state, they don't really enter the market because by the time out-of-state milk got to Montana from, say, Texas, traveling slowly by truck, the milk would be so close to its not-based-on-science sell-by date that a store would only have a few days to sell it. Better to stock in-state milk. Almost 100% of milk in Montana does come from Montana - Montana cows, Montana processing plants. And there was a time when the 12-day sell-by rule didn't mean stores had to throw away milk. Greg Hertz owns five grocery stores in Montana. He's also a state lawmaker, Republican. And back in the 2000s, Greg Hertz says the two big dairy processors in the state used to take back all of the unsold milk from his stores at no cost.

GREG HERTZ: Oh, yeah. We'll take it back, and we'll trade you out for some new milk.

GONZALEZ: They do this because they could turn the milk into something else.

HERTZ: You know, like, maybe cheese, yogurt.

GONZALEZ: But then the two big dairy processors decided to stick to just making regular milk - no more cheese. That's when there was no place for unsold milk to go.

HERTZ: You could donate the milk, but it was in violation of state law.

GONZALEZ: So you couldn't then.

HERTZ: Right.

GONZALEZ: I'm picking up that you did anyway.

HERTZ: Yeah.

GONZALEZ: Last year, the state clarified that you can actually donate milk past the sell-by date now. But it's just not always an option, like for Cory Thompson, who threw that milk in the garbage.

THOMPSON: And, like, our food bank here is awful small. They don't have a refrigerator, so they don't do milk at the food bank.

GONZALEZ: By the way, every gallon of milk that doesn't get consumed, 4 1/2 gallons of water went into making it. Sarah Gonzalez, NPR News. Transcript provided by NPR, Copyright NPR.

Sarah Gonzalez
Sarah Gonzalez is a host and reporter with Planet Money, NPR's award-winning podcast that finds creative, entertaining ways to make sense of the big, complicated forces that move our economy. She joined the team in April 2018.