Rising to the top
Small Wisconsin specialty dairy co-ops finding new niche markets
By Pamela J. Karg
Editor’s note: Karg is an agriculture
communicator based in Baraboo, Wis.,
with extensive experience writing about
cooperatives.
airy co-ops merging to
create larger marketing
operations has been a
major news story of the
past decade. But a number
of new, small dairy cooperatives that
service niche markets are also popping
up in America’s Dairyland. Their mission
can be complex, but their message
is simple: gaining a share of a growing
dairy market for their members.
In a dairy landscape dominated by
such large co-ops as Dairy Farmers of
America, Land O’Lakes, Foremost
Farms USA, Associated Milk Producers
Inc., Swiss Valley and Alto Dairy,
the new Scenic Valley Protein Producers
Cooperative is barely a blip on the
radar screen. But what Scenic Valley
lacks in size, it makes up for in the dedication
of its members.
Started 4 years ago, the membership
now includes 11 farm families. They
are primarily “colored breed” producers.
That is, they milk dairy cows other
than the familiar black-and-white Holsteins.
Their president and field representative
is Jersey producer Mike Gallagher
of Darlington, Wis.
“Our goal is to earn more money for
our milk,” Gallagher explains. “With
the cheese yield formula first proposed
by the National All-Jersey Association
and adopted by the U.S. dairy industry
several years ago, we naturally were
getting the full-value price for our
milk. When we didn’t have that available,
we were getting approximately
from $1 to $2 a hundredweight less
than we’re getting right now.”
The Jersey cow
To understand Scenic Valley Co-op,
one first needs to understand the Jersey
cow. Compared to the five other major
breeds milked in the United States,
Jerseys give less milk. However, their
milk is higher in protein and butterfat
important ingredients for cheesemakers.
In Wisconsin, 85 percent of
the 23 billion pounds (or 2.7 billion
gallons) of milk produced on its 18,000
dairy farms goes into producing 300
styles and types of cheese. That makes
cheese king in America’s Dairyland,
and it made the colored breed producers
believe they had something of value
they could capitalize on.
“Jersey milk, on average in a Cheddar
cheese plant, will yield about 100 to
125 percent per hundredweight of
what Holstein milk will yield. Thus, it
is of more value to the plant
and so, of course, to the owner,”
explains Mike Brown,
general manager of National
All-Jersey, the breed’s national
association, headquartered
in Reynoldsburg, Ohio.
“We would meet at night, at
least once a week, to brainstorm
ideas and discuss business,”
Gallagher explains.
“Finally, we decided it was
time to try it.”
What the original five
families did was contract with
a small, privately operated,
family-owned cheese plant.
Several times a year, milk
from the Jersey producers is
picked up and processed separately
into cheese. Once
aged, cut and wrapped into
consumer sizes, the producers
sell the cheese under their own label to
retail outlets. They also offer the
“Scenic Valley Jersey Cheese” products
at holiday time, combining it with
locally produced sausages and other
foods in gift boxes.
“The most interesting thing last
year, when orders came in, was to see
where they came from,” Gallagher
says. “There were orders coming from
all over the United States, and we did it
by just telling our co-op story to customers
and then putting a brochure
in every box we shipped.”
Telling its story
Gallagher is one of five co-op directors.
The others are Gene Dirksen, vice
president, from Darlington; Steve Holland,
secretary, from Gratiot; John
Foley, Darlington; and Jonathon Primley,
Blanchardville. Like their other four
member-farms, none of these five members
milk more than about 100 cows.
The members pride themselves on the
natural farming methods they use, pasturing
or grazing their Jersey cows on
green pasture about half the year.
That pasturing gives the cheese
made from the milk a “more natural
flavor,” the co-op’s brochure explains
to consumers. Cheesemakers agree that
milk shipped from different regions of
the state or even raised differently
grazed vs. confinement puts subtle
flavors into the milk. As cheesemakers,
their challenge is to then bring out and
enhance those subtle differences to
produce something consumers want. In
fact, that is the basis for the growth
seen during the past decade in the
number of farmstead cheesemaking
operations across the United States.
In addition, pasturing or grazing
ruminants has also proven healthy for
humans who eat their meat or dairy
products. Those products have proven
to be higher in conjugated linoleic acid
(CLA), a cancer-fighting “good” fat
discovered by researchers (see related
story).
The Scenic Valley families have
pledged not to use hormones in their
herds. Neither is animal rennet used to
make cheese. Rennet is the enzyme
that makes the milk set up so curds can
form. It occurs naturally in the stomachs
of calves and some other animals.
Therefore, Scenic Valley’s contracted
cheesemaker uses synthetic rennet. Coop
members use only enough pharmaceuticals
to keep their herds healthy.
These producers are learning firsthand
what large corporations and their
public relations and marketing
specialists already know: it’s all
about image. With help from
sources such as the Wisconsin
Milk Marketing Board and the
University of Wisconsin-Madison
Center for Cooperatives,
the producers pulled together
their story in a brochure. The
four color piece is printed from
a computer owned by the
cooperative. In fact, the co-op
is beginning to acquire more
assets. The members recently
purchased the old Darlington
town hall, which was previously
a rural school building. This
summer they will be renovating
the town hall into a cheese distribution
center. They’ve also
purchased a cooler and trailer
so they can sell their cheese at
local farmers’ markets and will
make deliveries to a growing list of retail
outlets.
“We’ll fix it up and offer our cheeses
for sale here, along with other Wisconsin
products and maybe even some
antiques or gifts,” Gallagher explains,
leaning against the chalkboard still
hanging in the schoolhouse-turnedtown-
hall-turned-cooperative. Last
Christmas, gift boxes were put together
and mailed from this building. It beats
doing it at their kitchen tables like last
year, Gallagher says.
Tough, but rewarding
It’s a bare-bones operation. The
cooler was purchased the last day of the
“going-out-of-business” sale held by
the local variety store. The counters
also came from there. They’ve hired
one person to help pack gift boxes,
while most members donate their time.
The building’s trim could use a coat of
paint and some remodeling is needed
on the inside.
Between the computer hardware and
the building, developing a logo and
working with a consultant to write a
business plan, the nine dairy farm families
haven’t seen much return on their
investments yet. The co-op’s ability to
grow is hampered by the fact that the
number of dairy farm families in Wisconsin
is dropping, though the number
of cows milked in the state remains
constant at about 1.3 million head. Still,
most Wisconsin dairy producers favor
Holsteins over Jerseys. And members
like Gallagher try to do it all run the
co-op, negotiate prices with the cheesemaker,
pay state required bonding fees
to ensure the milk checks are good,
make calls on local supermarkets that
offer the cheese, talk to other suppliers
and distributors who are showing some
interest in the Scenic Valley idea and
still find time to farm.
“Easy? It isn’t easy. Let’s put it that
way. But it’s kind of fun,” Gallagher
says of trying to do it all, including
marketing the co-op’s seven products:
Cheddar, Colby, Creamy Jack and Pepper
Jack natural cheeses, as well as garlic,
plain and jalapeńo cheese spreads.
“It does take a lot of time and some-
times it seems like just bits and pieces
here and there. But a lot of time and
contacts and legwork.”
Currently, only about 10 percent of
total milk production by Scenic Valley
members is separated out for production
under their own label. This year,
the co-op hopes to create enough
demand that members have 50 percent
of their milk made into their product.
When they do, they’ll improve their
possibilities for grabbing a larger share
of a growing national cheese market,
Gallagher says. (See sidebar above.)
New co-ops in town
Scenic Valley might have been the
first dairy co-op in Wisconsin to try to
value its milk and cheese for its grazing
and Jersey characteristics. Yet, it’s not
the only one around. Since Scenic Valley
formed, at least two other co-ops
have started. One is located outside
LaCrosse, while another is located in
northeastern Wisconsin, near Seymour.
“Within the last two years, we
became aware of some nutrients
(including CLA) that were in the milk
from cows on pasture that are not present
in milk from cows fed typical
confinement feed,” notes Rick Adamski.
He and his wife, Valerie Dantoin-
Adamski, operate his family’s 100-
year-old Full Circle Farm. “We
started exploring the possibility of
marketing those nutrients. We’re also
learning more about the nutrients;
there are more nutrients in the milk
from these cows, so we have a whole
new area to explore.”
Typically, their milk goes to the
employee-owned Antigo, Wis., Cheese
Co. In conducting experiments to
determine the level and value of the
CLA in milk and then cheese, the
Adamskis contracted with a Green Bay
cheesemaker to process it separately
into white Cheddar cheese. Testing
proved the cheese retains the higher
CLA levels of the milk.
“We’re lucky we live in Wisconsin
with so many smaller cheese plants,”
Dantoin-Adamski says. “Rather than
learning the cheesemaking process and
putting in something here on the farm,
we contracted with Jim to process our
milk into cheese just as we do for
hay making and everything else on the
farm so that we can just concentrate on
grazing our cows.”
The Adamskis began marketing the
seasonal cheese under their own
label Northern Meadows Cheddar
directly to consumers and have formed
a cooperative with several other producers.
They market it to some natural
food stores in northeastern Wisconsin
and in Madison, and a few upscale
delis carry the product. However,
Dantoin-Adamski wants to make it
available to everyone, regardless of
income, because everyone deserves
good, nutritious foods.
Seeking higher premiums
Dantoin-Adamski believes the higher
CLA level of Northern Meadow cheese
can open the possibility of premiums
based on the CLA content in milk, if
the milk and related dairy products can
be marketed for their CLA content.
The all-natural Northern Meadow
cheddar has a flavor distinct to the
region where it’s made, and that flavor
will vary year-to-year depending on
sunshine, rain and plant growth. Full
Circle sold its cheese, made at a small
cheese plant in DePere, for $5 per
pound. At that price, the cheese could
support a milk payment price of about
$16 per hundredweight.
“The Adamskis’ efforts may provide
a model for other dairy grazers interested
in adding value to their milk production,”
said Stan Shaw, administrator
of Wisconsin DATCP’s marketing division.
“By focusing on a possible consumer
benefit found within their
cheese, they may have a firm foundation
to enter the marketplace.”
“We have combined efforts with four
other family farms to form a new cooperative
called the Wisconsin Dairy Graziers
Co-op,” Dantoin-Adamski
explains. “These farms graze cows in virtually
the same way our farm does.W e
are pooling our milk and cheesemaking
so that we can make enough volume to
reach the economies of scale needed to
market our cheese efficiently.”
The handcrafted cheese is made
exclusively from the milk of these cows
that graze on grass and clover meadows.
The Adamskis note that only
when cows graze on fresh plants
directly in the field can they obtain
higher levels of CLA. “This superior
Wisconsin cheese has a flavor that, like
a fine wine, is unique to the region,”
Dantoin-Adamski says, pointing out
that the conservation award-winning
Full Circle Farm and the other members
of the co-op are located about 25
miles from Lake Michigan and on the
edge of the Nicolet National Forest.
Already participants in USDA’s Sustainable
Agriculture Research and Education
program in the 1990s, the
Adamskis received a $20,000 Agricultural
Development and Diversification
grant this summer from the Wisconsin
Department of Agriculture. They are
using it to identify the marketing feasibility
of pasture-based cheese and dairy
products for the Wisconsin Dairy Grazier
Cooperative, the newest such
organization to form. The Adamskis
and the Gallaghers have talked about
similar challenges and opportunities.
“We’d like to stay right around 25
member farms,” Gallagher explains.
“But there are ways that our co-op
could work with other groups, like
the Adamskis, to offer other products
they might make. And I think all the
small co-ops need to get together
through an organization, like the
Center for Co-ops, to talk over common
business issues so that we’re all
learning and growing.”
