On-farm milk processing - a way to 'control your own destiny'

Saturday, November 3, 2012

That's how one Creemore-area farmer sees his decision to process his own milk. But marketing skills and a sales plan are also essential

by SUSAN MANN

When two Ontario farming families decided to establish on-farm milk processing plants, they didn't expect that finding the right-sized equipment would prove a major challenge.

For their Sheldon Creek Dairy, located in Loretto near Alliston, John and Bonnie den Haan and family had their equipment built. Their equipment was made by a neighbour who works for a company in Mississauga that builds pasteurizers and other equipment, John den Haan says. The person who did their excavating suggested they talk to the neighbour.

The small pasteurizer that resulted can do 1,500 litres an hour.

Setting up an on-farm fluid processing plant wasn't easy. "It was a little daunting in that nobody in Canada has built anything this small before," Bonnie den Haan says. "It was really hard to find good help and advice."

John Miller, owner of Miller's Dairy Ltd., says he and his wife, Marie, bought all of their equipment from a South Carolina on-farm processing plant that was closing. They shipped it to their Creemore-area processor, located on the same property as their 700-acre farm, Jalon Farms Ltd., and refurbished it. But electrical controls had to be upgraded at a considerable cost because the equipment was designed for use in the United States, where regulations are different.

Both Miller's and Sheldon Creek held open houses this summer to launch their businesses. They're among the three on-farm fluid milk processors and two cheese makers taking part in Project Farmgate, started in 2009 by Dairy Farmers of Ontario (DFO) to help dairy farmers establish on-farm fluid milk processing plants. The project's initial intent was to determine whether on-farm fluid milk processing was viable, but some participants wanted to manufacture cheese, so the project morphed into Project Origin to encompass both fluid and industrial products. The five producer-processors in Project Origin are: Miller's Dairy, Sheldon Creek Dairy, Limestone Creamery (fluid), Mountain Oak Artisan Cheese, and Gunn's Hill Artisan Cheese.

The Millers milk 120 purebred Jerseys and have another 120 young stock for replacements. They grow feed for the herd on 275 acres and also produce cash crops of corn, soybeans and wheat.

Their 5,600-square-foot processing plant is located about 40 feet from their free-stall barn.

Eventually the Millers will be processing their entire on-farm production but, for now, they're processing two days' worth of production every week from the farm. Their product is available in quart and half-gallon glass bottles and they're producing a wide range of milk: whole, two and one per cent, skim, chocolate milk, 10 per cent cream, half and half, and 35 per cent whipping cream.

The product is available at smaller retail stores in several communities including Creemore, Stayner, Wasaga Beach, Collingwood and Barrie. John Miller says a manager at one of the large chains wants the milk in his store because it is a unique product. It is tough to break into chain stores because they have contracts with large dairies.

"One big corporation has a contract with another big corporation," Miller says. "You have to squeeze a little hole through.

"I knew it wasn't going to be easy," Miller says. "Otherwise everyone would be doing it."

The Millers' milk is available at retail outlets in several communities including Creemore, Stayner, Wasaga Beach, Collingwood and Barrie.

Dairy farming and processing are both in Miller's blood. Their farming operation is Miller's great grandmother's family farm and has had Jerseys since 1959. On the processing side, Miller's mother's family operated a fluid milk processing and bottling business in Goderich called Bisset Brothers Limited. In the early 1930s they changed to manufacturing ice cream and butter.

"My great grandfather, Sam Bisset, is credited with being the first dairyman in Canada to put milk in a milk bottle in 1896," he says.

Miller says he wanted to get into processing so he could "have more control over our destiny." He was exposed to processing as a child and it's been in the back of his mind for a long time. "I always thought it would be fun to do."

Having an on-farm fluid operation requires marketing skills and a plan to sell the milk. "How are you going entice the public to buy your product?" he asks, noting they're marketing the unique characteristics of Jersey milk.

The den Haan family milks 50 purebred Holsteins on their Haanview farming operation, a 400-acre, third-generation family farm. They grow all their own feed and the cows are pastured in the summer.

A daughter, Marianne, teaches high school at the Arctic Circle but also does the marketing, advertising and delivery logistics for Sheldon Creek Dairy. Another daughter, Emily, is studying dairy nutrition at the University of Guelph and wants to take over the farm someday. Their two sons are also dairy farmers with their own operations.

Bonnie and John's 3,000-square-foot processing building is located on their farm, where they pasteurize and bottle about 20 per cent of their current farm's production, between 2,000 and 3,000 litres a week.

They're generally processing one to two days a week and, in five years, plan to process all their production. Their non-homogenized chocolate and whole milk is sold in glass bottles. They also make plain and vanilla yogurt and are experimenting with some fruit-flavoured yogurts. The products are available in 30 stores north of the Greater Toronto Area and in their on-farm store.

The den Haans decided to get into processing because people were constantly asking for raw milk and they still are. The processing side of their business has made them very aware of consumer wants. "People want to know their farmer. They love it that we call our cows by name," Bonnie says.

There is a demand for milk that has not been homogenized. Some repeat customers tell the den Haans they have unable to drink mainstream fluid milk products for 10 years.

Bill Mitchell, DFO's assistant communications director, says no policies were changed to allow for on-farm processing, including for fluid milk, and the farmer/processor pays the same per hectolitre fees on his milk as other farmers. Bulk tank milk graders also go to the on-farm processors every second day, just like they go to all other farmers. They measure the volume and do all the same grading exercises they'd do if they were picking the milk up and shipping it to a plant.  

The farmers sell the milk to DFO and then buy back the portion they're using for processing. But the portion they're processing themselves doesn't leave the farm.

DFO launched Project Origin so farmers could respond to customers eager for local food and wanting to buy milk directly from producers. "Fluid milk processing on-farm could fill those sorts of market demands," he says. The participating farmers already meet all of the DFO rules and regulations. To set up their processing plants, they also had to meet provincial Milk Act requirements for plants.

Agriculture ministry spokesperson Susan Murray says by email that "because food safety is a priority, all dairy plants regardless of size or location must comply with the same requirements under the Milk Act and all other provincial, federal and municipal legislation that applies to the operation."

But the on-farm fluid processors didn't need a tank truck receiving bay, she says, noting that one isn't always necessary for farmers with on-farm plants only processing cow's milk from their own farm.

Do on-farm processors take away from mainstream milk production? Mitchell says there isn't a definitive answer. There's always a question of whether production from a new brand cannibalizes existing product sales. "Most likely those milk consumers were buying milk somewhere, but will they buy more?" Or will customers not buying milk  start purchasing from on-farm processors because the perception is it's more local? Mitchell says he doesn't know. BF