Is your farm right for value-added dairy? In most cases, the question asked is: “Is value-added dairy right for your farm?” but maybe it is worth considering the reverse of that question when deciding whether to pursue a value-added dairy operation.
Is your farm up to meeting the demands on production and labor of a value-added operation while conveying a consumer-friendly farm image?
Here are some points to consider when evaluating your farm.
Type of value-added product
Value-added products have some attribute that differentiates them from the competition, resulting in commanding higher prices from consumers or an ability to reach a new market for that product. Does your farm currently fit with the value-added aspect of your intended product? Are you producing something different than “the norm”?
Based on the quality parameters and components of the milk produced, some products may be better suited for a value-added enterprise. Value-added products could be derived from the production system implemented on the farm such as organic, grass-fed, A2, kosher or milk from sheep or goats. Choosing to market a product based on a key attribute such as “locally produced” is another means of adding value to your dairy product.
Farm location
The location of the farm is an important consideration even if products will not be sold directly from the farm to consumers. Accessibility to highways or other transportation routes should be considered for retail markets. Is significant shipping or travel time required to reach intended markets such as an urban center?
If the product will be direct-marketed from the farm, is the location accessible and visible to consumers, or will they have to make a specific trip for that product? Is there another draw to the area via tourism or local farmstead markets for produce, fruit, meat or other commodities frequented by consumers?
If consumers will be visiting the farm, does the appearance of the farm accurately portray the quality of the product? In cases where some of the less appealing aspects of the farm, like manure storage, heavy-use areas or compost sites are readily visible to the public, then be prepared for questions and take the opportunity to educate consumers about agricultural practices.
Also keep in mind issues related to biosecurity and safety if consumers will be able to access areas of the farm where animals are housed, such as calf pens. Hand-washing stations or restrooms may be needed if farm tours are part of your plan for promoting products.
Facilities
Aside from the location of the farm, the proximity and location of the intended processing facility relative to the farming operation should be considered. Facilities should be situated to minimize the likelihood of cross-contamination of food products with pathogens from the farm. Bringing a regulatory official, consultant or engineer into the conversation early can help to expedite planning.
The quantity and quality of the water supply should be considered for both the farm and the processing operation, as water quality can affect cleaning, sanitizing and finished product quality. Along the same lines, a plan is needed for waste and wastewater to minimize possible contamination.
Conduct research on permitting needs pertaining to operating a business, water, sewage and building codes at the local and state levels. Consider storage requirements for a variety of items including milk for product manufacture, packaging containers, finished products and for aging products.
Farm management
Managing a value-added operation and a farm can be very strenuous when you consider the demands of the daily operations of the farm along with those of a food processing facility. Will the same person be responsible for both aspects of the dairy operation?
Each aspect requires different expertise and likely requires different skills sets. Will other members of the farm family be involved with the value-added enterprise, or will outside labor need to be added?
In order to prevent the contamination of food products, a clear separation of farm versus processing duties is required and requires strict adherence. This separation is dependent upon the physical layout of the processing facility or area in proximity to the farming operation, the production schedule and the control of the traffic flow between the farm and processing area to minimize cross-contamination.
An employee may be able to work on processing in the morning and farm tasks in the afternoon but should not go back to processing again once that barrier is crossed. Working first on the farm, then processing would not be an acceptable food safety practice unless protective measures are in place and employees are properly trained.
Management needs to plan on dedicating considerable time to the record-keeping and documentation of the food processing practices detailed in the food safety plan and to the implementation of good manufacturing practices.
Time
If you are considering marketing a value-added product dependent on a production system that is an addition to or a change from your current production, allow adequate time for the transition along with developing a plan for the transition. Dietary needs of the herd may change as different grazing practices are implemented.
Energy expenditures may be greater if cows will spend more time on pasture or have to travel greater distances to reach pastures. Herd health programs may undergo transitions as well.
Developing standard operating procedures to aid in documentation and consistency in production can make product manufacture easier and more consistent while aiding in maintaining milk quality. Time should be devoted to training farm help or employees to follow these standard operating procedures.
Motivation
If you are exploring value-added dairy, then consider the motivation behind your vocation as a farmer. Do you enjoy working with your cows on a daily basis? Do you want to be involved with day-to-day operations on the farm? Are you passionate about creating a food product? A value-added operation may place demands on your time that take away from the activities you enjoy – or lead you to new enjoyable aspects of the job.
The alternative is to find another person to operate the value-added business, which may lend to incorporating family members into the business to divide labor or bringing someone into the business to oversee the value-added operation. An alternative is to seek a cooperative, processor or incubator kitchen to contract with to produce a product with your label.
In addition to giving careful consideration of the items discussed, continue to gather as much information as you can about starting a value-added dairy business. Visit other value-added processors and talk with them. If the farm currently does not have team meetings, this would be a good place to start to weigh the options.
If a team already is meeting, then add the value-added option to the agenda or start a sub-team utilizing expertise on value-added dairy. Keep in mind: Transitioning to a different production system or taking on a new enterprise may require time to implement and expertise from a support system. 
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Ginger Fenton
- Dairy Extension Educator
- Penn State Extension
- Email Ginger Fenton
