Panelists: Look for ways to add value to dairy business

When life gives you cow’s milk, make cheese curds. Or give tours. Or sell under someone else’s label.

The name of the game in farming these days is value-added. And with all of the odds dairy farmers face, adding value is more than a game.

“I always say that the difference between owning a farm and owning a cheese factory is that with a dairy farm, you milk the cows, and the next day a truck takes the milk away, and with a cheese factory, you invest all this time and stainless steel into the factory before you’ve ever sold a piece of cheese,” said Mark Crave, one of four brothers who own Crave Brothers Farm and Crave Brothers Farmstead Cheese in Waterloo. “Then you start making cheese, sending out samples and hoping for orders.”

If it means a sale, go ahead and make something under someone else’s label. More cheese on the dairy case shelves is made by Crave Bros. than would appear, he said. “No one knows it’s ours because it’s made under different names. Never say no to a sale.”

Crave joined two other farmer-processors in a panel discussion during the Dairy Strong conference Jan. 23 as part of a track breakout session on business development.

Trends, fads, dietary changes and concern for the environment all affect dairy farmers. Customers are concerned about pesticides and chemicals in food, synthetic hormones, animal comfort and manure runoff, among other issues.

“All of the trends that we see are bonuses for farmers, as well as negatives for farmers,” said James Baerwolf, owner of Baerwolf Dairies and Sassy Cow Creamery in Columbus. “People are more choosey, and all of these choices means you’re on a shelf with 10 times more products available to them.”

Baerwolf said a dairy farm’s main opposition isn’t another dairy, it’s a plant –– a reference to the current debate about labeling beverages made of almonds and soy as milk.

“People are buying a wider variety of things,” Baerwolf said. “You’re selling food, but it’s a people business. It’s important to spend some time finding out who your customers are.”

Jerry Jennissen, owner of Jer-Lindy Farms and Redhead Creamery in Brooten, Minn., said one of his four daughters decided she wanted to farm, with one caveat: “She didn’t want to milk cows,” Jennissen said.

So they set up Redhead Creamery, which daughter Alise Sjostrom runs. It produces cheese and hosts paid tours of the farm — an extra source of revenue for a dairy farm when milk prices are basement low.

“We were told that opening the farm to the public would be an important thing to do, but it turned out to be an even bigger deal than we’d thought,” Jennissen said. “Between 50,000 and 60,000 people have visited since we opened.”

The farm is open Fridays and Saturdays. They do bus tours, farm-to-table dinner events and special events once or twice a month for six months of the year.

“Farm tours bring us closer to consumers, the majority of whom are urban dwellers, and many are from the Twin Cities,” Jennissen said.

The profit margin for the bus tours and farm dinners is significant, and the creamery side of the business has a higher profit margin potential than the farm side of the business, he said.

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