Cheese has not traditionally been a focus for Virginia. Eric Paulson, executive secretary of the Virginia State Dairymen’s Association, said about 85% of the milk produced in the state is used and consumed as fluid milk.
“Fluid milk was king, so that’s kind of what we focused on,” he said.
But tastes and trends have changed.
While the demand for fluid milk has declined over the years, so called value-added dairy products like cheese and butter have made gains. A 2018 study on the feasibility of attracting dairy processors to the state indicates per capita cheese consumption doubled over the past decade.
The study was conducted after the dairymen’s association asked the state’s secretaries of agriculture and commerce to look at opportunities in the sector.
Currently, the state is home to few commercial dairy processing plants. The study identified only six, which vary in size. In addition to fluid milk, some make products like cream or cottage cheese, but other kinds of cheese are absent from their offerings.
Among those processors is Franklin County’s Homestead Creamery, which produces items including milk, ice cream and butter. Company officials said they are interested in offering cheese as well, but the lack of local processors poses a challenge.
“Commercial cheese processing is not a facet of dairy production that has found a home in Virginia,” the study states.
Seven localities where dairy has a presence were part of the study; locally that included Franklin, Botetourt and Pulaski counties.
Milk and other dairy products are among the state’s top-grossing agricultural products, according to the Virginia Department of Agriculture and Consumer Services. The sector ranks fourth, with $285 million in cash receipts.
The study confirmed the point Paulson made when he asked the state to explore its ability to attract a processor: Virginia could benefit from capitalizing on consumer trends.
“We definitely don’t want to ignore that sector [fluid milk], but at the same time it only makes sense to diversify yourself and spread the risk,” Paulson said.
He thinks Virginia would be well-suited to host dairy processors given its proximity to major population centers and access to export markets.
Small and regional processing facilities are the best bets for Virginia, the state study determined. A small or artisanal facility is one that would require an initial investment of roughly $700,000 and generate annual revenue in the range of $1.1 million to $1.3 million. A regional facility would require a $20 million to $25 million initial investment and generate $50 million to $65 million in annual revenue.
Dairy farmers would benefit from having additional avenues for their product. If there was a surplus of milk, Paulson explained, farmers could send their product to a local processor that would turn it into cheese. He said it takes 10 pounds of milk to make one pound of cheese.
“You don’t want to be tied to just one product because then you’re bound to the rise and fall of that one thing,” Paulson said.
Homestead Creamery a success story
With the study complete, it’s now up to economic development officials to recruit those dairy processors.
Secretary of Agriculture and Forestry Bettina Ring said the study provides guidance for state officials to support the struggling agricultural sector, which has seen a decline in the number of small dairy farms.
Value-added products can help make a business viable and keep farmland in the family, Ring said. As success stories, she points to Homestead Creamery, which sources its milk from local dairies, and Richlands Dairy in Dinwiddie County, which recently added a creamery and store last year.
“It really is that value-added processing that we’ve got to focus our attention on and try to bring to Virginia to provide more opportunities and markets,” Ring said.
The American Cheese Society this year held its annual conference in Richmond. It was a chance for officials to make connections both with larger cheesemakers and smaller artisan operations, Ring said. Large buyers like Wegmans, which she praised for featuring Virginia products, also attended.
State and local officials were also there, Ring said, telling Virginia’s dairy story.
The secretary said bringing state agencies and local governments together is essential if the state hopes to attract value-added processors. Providing incentives for job creation, offering a prepared workforce and making sure infrastructure is in place and industrial sites are available are all joint efforts.
“It’s going to take all of us because it’s a really challenging subject,” she said.
The Botetourt County Board of Supervisors has made a commitment to engage in agricultural development and do what it can to help farmers, so it was natural to participate in the study, Ken McFadyen, the county’s economic development director, said.
The study resulted in a marketing tool to be used by the Virginia Department of Agriculture and Consumer Services, the Virginia Economic Development Partnership and the participating localities in their efforts to attract these processors, McFadyen said.
“I think this is the proactive type of economic development marketing that we need to do more of in Virginia and in the Roanoke Valley,” he said. “Seeking out those opportunities instead of waiting for those opportunities to seek us.”
As one of the top dairy producers in the state, Franklin County has a vested interest in the industry’s future.
Economic Development Director Michael Burnette said the study demonstrated that while there are certainly pressures on the dairy industry, demand for some products is growing.
“I think we’re trying to find ways in the region that we can increase the demand for those dairy farmers and hopefully help our agricultural industry at the same time to increase the industrial base as well,” he said.
Attracting a dairy processor could help the county reach multiple goals, Burnette said: adding to the tax base and bringing new jobs to the community while supporting the agricultural industry, an essential piece of Franklin County’s heritage.
Homestead Creamery President Kasey Kohl said branching out into value-added products helps companies like his remain sustainable. There are peaks and valleys to the demand for milk, and products like cheese or butter can help to fill those valleys.
Milk consumption is cyclical, Kohl explained. There are times of year — like back to school and the holiday season, when eggnog and custard hit grocery stores — when the demand for milk is high. But you can’t just tell a cow to produce more or less milk depending on demand, he said. Excess milk can be directed toward other products like cheese, which has a longer shelf life.
For a brief period, Homestead Creamery worked with a North Carolina processor to make cheese. The relationship didn’t work out, but it hasn’t diminished the company’s interest in cheese, Rose Jeter, sales and marketing manager, said.
“There’s certainly a market for local cheese; we believe that,” she said.
The problem is, there’s not a local processor to work with. Jeter said the creamery has to consider the costs of shipping the milk to a processor and then bringing the finished product back. If a processor is too far away, it won’t be profitable.
But Jeter and Kohl both said the creamery hopes to one day produce cheese itself. It’s in the long-term plans, Kohl said, but not something the creamery is ready for just yet.
“Cheese is in the future for us,” he said.