Creating a Farmers-Owned Value-Added Production/Processing Facility for Dairy Farmers in Central PA; A Joint Farmer/Community R-D Project

Final Report for LNE98-099

Project Type: Research and Education
Funds awarded in 1998: $40,000.00
Projected End Date: 12/31/2000
Matching Federal Funds: $745.00
Matching Non-Federal Funds: $10,000.00
Region: Northeast
State: Pennsylvania
Project Leader:
Jill Abrahamson
Union Co. Planning Department
Co-Leaders:
Bill Deitrick
Union Co. Conservation District
Joe Detelj
Union Co. Chamber of Commerce
Nancy Roberts DePoe
Penn State Extension
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Project Information

Summary:

Our project was designed as a follow-up to a Union County initiative that was conducted by the American Farmland Trust. That study looked at farmland preservation in Union County. The Union County Ag Committee was concerned that farmer preservation be addressed directly and hence the following work is a result.

The approach taken was two-fold. First, the Committee wanted as much involvement with the Ag Community as possible with an emphasis placed on farmer ownership of the project. The offices of Extension, the Chamber, and the Conservation District would enable and support the grass roots effort we were seeking.

As a result of this approach a series of public meetings were held in four separate locations convenient at some point to the surrounding communities. We brought together al the official ag agencies with information and displays, as well as existing farmers engaged in value-added production to speak to their peers.

At the conclusion of these forums we were able to recruit local farmers in our effort with varying degrees of success. The Committee understands the need for this involvement, in particular, as the producers input was critical in directing the content of the reports that were to be generated in the complimentary activity to our approach which was the contracting for some unique research.

The Committee developed an RFP and employed Yellow Wood Associates to do a two-part study. The first study looked at the feasibility for value-added dairy products in Union and surrounding counties. The second study was a market analysis of appropriate retail outlets for value-added dairy products.

The project was concluded with the distribution of the reports and two on-site field trips to existing value-added operations.

The Committee is now forming a program of works that will continue exploring several avenues of value-added production that became apparent through the course of our activities.

As a result of this effort, which will be ongoing, several corollary benefits were derived: a sub-committee of the group opened a farmers’ market in Mifflinburg; a local dairy co-op received USDA loan guarantees and private financing for $1,000,000 to construct a retail/bottling operation; and another local dairyman and committee member is engaged in starting a bottling operation with an emphasis on local retail sales.

The study helped clarify our purpose and energized a core group of producers to continue developing retail/value-added opportunities through their participation in the Agricultural Economic Development Committee of the Union County Chamber of Commerce.

Research

Materials and methods:

The formal studies were let in two separate transactions as the Committee was very concerned that we manage costs and specify exactly what we expected to receive. By splitting the contract, so to speak, we could evaluate the feasibility study and clearly spell out what we were looking for in the market analysis.

The collaborative approach also allowed for inclusion of critiques from the audience we were looking to reach. This method, though more time-consuming and a cause for some delay on our part in completing our work within the prescribed time limits, ultimately produced a more valuable body of work for our producers.

The public meetings were also extremely valuable in pointing to the complimentary activities which we could further develop. Though some of the insight was not directly related to dairy value-added, it was of prime importance to our overriding concern of farmer preservation and provided insight into exceptional corollary opportunities.

Research results and discussion:

The Mifflinburg Farmers’ Market, which is a growers only market, was an offshoot of the meetings by the Ag Committee. It presently has approximately a dozen local growers with a retail outlet every Saturday morning. This effort has produced support from the local elected officials and has established a continuing presence for the support to local value-added products.

The two reports provided an invaluable service in the approval process of USDA and influenced their decision to provide an 80% guarantee on a $1,000,000 loan to local producers who are developing a retail/bottling operation. The mechanics of volume and excess capacity have been worked out in great detail by the participants. The missing analysis was the potential market, and our report served that purpose beautifully.

A small group of Committee members are also presently formulating strategy around a cooperatively owned retail outlet that would serve exclusively local producers of food and fiber.

A very significant result of the work was the recognition that a major need existed for a full-time marketing specialist to work with local producers. Funding to support this full-time position for a multi-county territory has been presented to the County Commissioners, Penn State Extension and a local philanthropic foundation. To date, the outlook is very favorable.

And directly, a local dairyman is in the later stages of creating a retail dairy. He would sell his own milk, ice cream, and yogurt. He will outlet cheese.

The study has been the catalyst for a great deal of directed effort in the value-added arena. The impetus to action has been significant and may only be the tip of the iceberg.

Participation Summary

Project Outcomes

Impacts of Results/Outcomes

The Ag Committee continues to function and has caused the farm community to monitor our progress with a great deal of interest. The full impact of our work will not be calculated until the bottling operations come on line and we succeed in securing the marketing position as a full-time asset.

But our enthusiasm and commitment has never been higher and we continue to move forward. I might add, we have received many calls from other groups working on similar projects (in particular the North East), who have seen us as a SARE recipient. We have distributed dozens of our reports to them and shared our insights. To date the response has been very favorable.

The reports have been made available to all the dairymen in the Susquehanna Valley.

In large measure, as a result of this project, a plan of work has been developed by the Ag Committee that details the essential components required for the full market development of locally produced Ag products. It is our mission to continue promoting value added production systems in order to preserve farms and farmers in the Susquehanna Valley. We will accomplish this by engaging and educating our local producers. It is our desire to promote economic security through the cultivation of marketing expertise and support.

Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.