LEACOCK TOWNSHIP, Pa. — Standing on a pasture where his herd of 35 Jersey brown dairy cows grazed on thick grass recently, Leroy Miller explained why he let the fenced borders of his Lancaster County farm grow up with trees, brush, and weeds.

It attracts groundhogs, he said. Farmers typically consider them a pest, but not Miller. “They turn up the soil and give the cows a chance to lick up minerals they’d never get otherwise,” he said.

That tactic is part of Miller’s take on regenerative dairy farming, which goes beyond standard organic methods to demand a strictly grass diet for cows, in the form of hay in the winter, and no grain, a common supplement on many organic dairy farms.

“An herbivore is designed for grass, as opposed to corn,” said Miller, whose cows get outside year around and can sometimes graze into late December. Miller also manages Oasis Creamery, in nearby Ronks, which specializes in grass-fed organic milk and cheese.

Miller’s approach to dairy farming is getting a boost through a $1 million grant, running through 2024, from the National Fish and Wildlife Foundation to a collection of sustainable agriculture advocacy groups. Their aim is to increase the number of dairy farms in Lancaster and nearby counties that feed their cows only grass and operate under a new organic certification, called regenerative organic.

The essence of USDA certified organic food is the prohibition of synthetic fertilizers and pesticides. Increased consumer interest in food quality has helped USDA organic food sales soar to $56.5 billion last year, more than double the $25.1 billion in 2011, according to the Organic Trade Association.

Fearing that organic ideals have been eroded by the category’s popularity, advocates for regenerative organic want to shift the focus to protecting the environment, animals, and workers. These are factors that increasing numbers of consumers care about, according to advocates of the movement, which gets its name from the notion that agriculture should regenerate or enrich the soil, not deplete it.

The anticipated financial engine for the regenerative organic effort in Central Pennsylvania is Cleveland-based Origin Milk Co., which is working with the nonprofits and private companies in the grant initiative.

Origin is aiming to pay 40 regenerative organic farmers $40 for every hundred pounds of milk, more than twice the current price for conventional milk and $10 more than standard organic milk. Not all of the extra money lands in the farmer’s pocket.

Grass-based milk brings higher prices to farmers, but the cows generally produce less milk because grass is not as energy-dense as corn. Grass is healthier for cows, though, farmers say, and is less costly to produce. That means grass-based dairy-farming can be advantageous for small farmers who can’t buy in large-enough quantities to get discounts on purchased feed.

The sweet spot for Amish farmers is 40 cows on 40 acres, said Jayne Sebright, executive director of the Center for Dairy Excellence, a Harrisburg nonprofit. But farms of that size have been disappearing. Statewide since 2015 the overall number of dairy farms has fallen by 19% to 5,430 from 6,770, but the number of cows is down only about 10%, which means that farms have gotten larger, on average.

Pennsylvania ranks seventh in the nation in milk production, but it has fallen from the number four spot over the last decade or so. The top three states are California, Wisconsin, and Idaho.

The grant project’s environmental backdrop is the decades-long failure of Pennsylvania to meet targets for reducing agricultural pollution in waterways that flow into the Chesapeake Bay. Only a third of the bay and its tidal rivers are healthy enough to support essential species, the Chesapeake Bay Foundation said last month, specifically citing Pennsylvania as a laggard.

The organizers of the grant hope to sign up enough small dairies — typically milking 50 cows or fewer — to convert 6,000 acres of cropland from corn and other annuals to deep-rooted pasture and moving 4,000 acres of cropland to perennial hay to prevent run-off into the bay.

“These are crops that are going to build soil and do a lot of great work in terms of water quality in a place like Lancaster,” said Franklin Egan, education director at Pasa Sustainable Agriculture, which is leading the grant effort.

Organic farming plus

For decades, grass-based and organic dairy farming have been strong in Pennsylvania, which had 362 organic dairy farms in 2019, third behind New York and Wisconsin, according to the U.S. Department of Agriculture.

Farmers said one reason they like grass-based dairy farming is their costs are lower than with grain-based farming. They don’t have to store feed most of the year. It goes right into the cow from the pastures, which have a mix of plants, such as alfalfa, clover, rye, fescue, orchard grass, and buckwheat.

“It only takes half as much equipment to make hay compared to needing to plant and harvest corn. Plus, the fact that your hay fields that you plant are perennials. You seed them down, and you don’t need to seed every year,” said Mahlon Weaver, 25, who farms in Washington Township, York County, and has USDA organic certification. Weaver has agreed to ship through Origin.

Pasa, Origin Milk, and others involved in the grant are asking farmers to get Regenerative Organic Certification, which was piloted in 2019 by the nonprofit Regenerative Organic Alliance, which oversees the granting of the certification worldwide. To earn the designation, a producer must first hold USDA organic certification or an international equivalent and then demonstrate compliance with additional standards to the alliance.

The alliance is currently processing more than 150 applications and has awarded nearly 30 certificates this year, Elizabeth Whitlow, the organization’s executive director, said last week. “Many of the certificates were awarded to grower groups and therefore represent hundreds if not thousands of small-holder farmers around the world,” she said.

The new category recaptures some of the ideals that were lost in the federal organic food standards, said Jeff Moyer, chief executive of the Rodale Institute in Kutztown and chairman of the Regenerative Organic Alliance.

The new certification requires farmers to improve animal welfare, boost soil health, and protect farm workers, Moyer said. One of its goals is to satisfy consumers who grew disenchanted by what some view as watered-down USDA organic standards.

In addition to tightening rules on pasture, regenerative organic prohibits traditional dairy barns, in which cows are tied in individual stalls, unable to turn around, for long periods during the winter. That’s the biggest challenge in moving from organic to regenerative organic, said Abner King, 32, who has a 40-cow dairy in Honey Brook, Chester County.

Switching barn styles takes an investment that could easily run $100,000 to $150,000 for a new milking parlor alone, said Bill Kitsch, chief revenue officer at Ephrata National Bank, which is offering loans for regenerative organic projects and bankrolling tax credits to pay for conservation projects.

King received his USDA Organic certification late last month, and hopes to add regenerative organic to his credentials in the next few months. He has two years to make the switch to a barn without tie-stalls. He has signed up with Origin.

Another significant change regarding animal welfare, King said, is the rule on bull calves, which are culled because they are not needed to replenish the herd.

“I can’t just send them up to the sale barn and just get rid of them like that,” said King. Instead, the calves must go to another pasture-based operation and be raised to maturity before they are slaughtered for meat to obtain the highest level of regenerative organic certification.

John Suh, Origin’s chief operating officer, said the company is talking with some meat companies that are interested in regenerative organic. “A few items need to be coordinated as we get things going,” he said.

Troubled milk market

Origin is trying to expand during a somewhat rocky period for organic milk.

Sales growth for organic milk has slowed to about 1% a year from 7% to 8% five years ago, said Edward Maltby, executive director of the Northeast Organic Dairy Producer’s Alliance, based in Deerfield, Mass. One of the big organic milk brands, Horizon, said last summer it was ending contracts with 89 farmers in New York and New England.

“Space in the dairy case is very tight, especially now that they’ve put these non-milk milks in there, the nuts and all the other plant-based stuff,” Maltby said. “That’s really cut into the organic sales.”

It won’t be easy for Origin, Maltby predicted. “Grass-fed milk, in general, is holding its own in the marketplace, but the leading brands in grass milk have laid off some of their own farmers.”

Origin is targeting an even narrower niche than grass-fed and regenerative organic.

The company takes milk only from breeds of cows, including brown and white Guernseys, with a particular genetic makeup. They produce what is sold as A2 milk. Advocates say A2 milk is easier for humans to digest than milk from most of the more popular black-and-white Holsteins, which have been bred to produce milk in large quantities.

Origin is not alone in that approach.

A Philadelphia Whole Foods store recently had three different brands of such milk, from Snowville Creamery in Ohio, Alexandre Family Farm, in California, which participated in a pilot for Regenerative Organic Certification, and publicly-traded a2 Milk Co. Ltd. The most expensive of those was Alexandre at $5.99 for a half gallon, compared to $2.29 for the Whole Foods brand of regular milk.

Origin hopes to be in stores with its regenerative organic line, cheese first, early next year, Suh, the Origin executive said.

Oasis Creamery, managed by Miller, the Leacock Township dairy farmer, has agreed to process milk for Origin. Growth has been strong at Oasis, Miller said, jumping to 330,000 gallons of milk processed last year from 90,000 gallons in 2018.

Miller, 47, said regenerative dairy has a stronger chance of success in Lancaster than in many other places, and not just because the county has so many cows and rich pastures.

“I think we have a stronger interest in younger farmers still wanting to farm,” he said.