Final Report for FS04-185
Due to low commodity prices for raw milk, dairy farms are rapidly going out of business. Without price supports, there is no way a small dairy can survive selling at the base commodity level. After years of financial problems, my dairy is down to only 25 milking cows.
In order to survive, my farm operation must adapt and change with the times. Rather than sell out to developers, I have chosen to become a small scale manufacturer of cheese to serve the Hispanic market in my area. I believe this opportunity can be shared with many small dairies in the southeastern United States.
This winter I will construct a sanitary cheese production building on my farm. I have reviewed the regulatory requirements and have designed a building where I can produce up to 100 pounds of pasteurized queso blanco (white cheese) per day that is fresher, cheaper, and better tasting than the competition.
An advantage of this soft white cheese that it is not aged and can be sold immediately upon production. Therefore the cash turnover will be quick and my operating capital will not be tied up in cheese in the process of aging. There is a requirement that this cheese be pasteurized to be legally sold. The North Carolina Department of Agriculture is initiating a farmstead cheese pasteurizer lender program. They have also recently completed a survey of more than 60 Hispanic grocers in western North Carolina. This survey has found that the average wholesale price of this cheese is approximately $3.85 per pound. Stores buy the cheese by the case and most sell several cases per week.
This project will track the production and sale of queso blanco cheese from Providence Farm over a six-month period. We expect to be able to produce and sell about 7,500 pounds of this cheese in this period. About 1,000 pounds will be direct-retailed at $5.50/lb, and the remainder will be wholesaled for about $3.50/lb. We have also been tracking all of the regulatory aspects of getting into this business, including getting waste permits, finding a way to dispose of the whey (we will give it to a cattleman to use as feed), meeting all regulations, and satisfying the county environmental inspector. We will share all of this information in our outreach.