Farmers Open Processing Plant for Milk
Published: Friday, March 19, 2021
With the intention of providing a sustainable income source for local farm families, a group of northern Indiana dairy farmers has opened a farmstead bottling plant and are marketing their own brand of all-natural dairy drinks throughout northern Indiana.
The farmers have formed a limited liability company, known as Amish Country Dairy, to bottle milk produced by small dairies in this area. The milk is currently sourced from a herd of 150 Holsteins at Harry Stutzman Jr.'s farm in Shipshewana. The bottling plant, which opened last October, is also located at his farm.
The four Amish farmers who manage the business operations—Stutzman, John Schwartz and Lamar Kuhns, both of Bremen, and Leon Miller of Goshen —are part of a larger group of investors, about 30 in all, who are looking to increase economic opportunities by becoming vertically integrated—producing, processing and marketing their own milk.
"This is for the community," Stutzman said, explaining why he and others started this venture.
As Miller points out, their milk tastes better because they start with quality ingredients, like whole milk and real fruit.
Also, the product is not homogenized and doesn't contain carrageenan, a natural thickening agent. Unlike most other commercial dairy drinks, the cream in Amish Country's milk rises to the top—which is viewed as a selling point.
As the label on the carton says, "Shake well. Separation is normal."
Miller said the pasteurization method, known as HTST (High Temperature, Short Time), involves heating the milk to 168 degrees for 16 seconds, then cooling it rapidly with a heat exchanger.
By comparison, most milk sold in grocery stores today is pasteurized at 280 degrees F. Miller said this method, known as Ultra Pasteurization, results in the product having a longer shelf life while sacrificing some taste.
Some on-farm dairies utilize vat pasteurization, a method in which the milk is heated to 155 degrees in a large container for 30 minutes. However, the Amish Country group decided they needed a system that pasteurizes milk more quickly.
"If we get to where we want to go, vat pasteurization won't be fast enough," Miller said. "This (HTST) is more for a larger number."
Amish Country's "cream top" milk can be found at roughly 35 retail locations in northern Indiana. The product comes in two sizes, 16 ounces and 59 ounces. A 16-ounce drink costs between $3.29 and $3.49 in stores.
While the price of Amish Country milk is higher than most other milk drinks on the market, the entrepreneurial farmers say their primary aim is quality, not cost. They're hoping to appeal to consumers who prefer premium beverages. Miller said he believes consumers will pay a little extra for an all-natural beverage that has a rich taste and none of the "gobbledygook" ingredients found in most other milk products.
For example, the fruit drinks are made with real strawberries, blueberries and peaches, not flavorings.
The most popular flavors, thus far, are a coffee-maple syrup blend and chocolate. Two weeks ago, they debuted strawberry. Other flavors include blueberry, peach, maple syrup and regular white milk.
For the farmers, it took nearly three years to go from concept to actual production.
Early on, Stutzman attended a series of meetings organized by Steve Engleking, LaGrange County Extension director, that explored opportunities related to on-farm processing.
Stutzman and his partners took the idea one step further. They visited other farms that had on-farm ventures and learned everything they could about the technical side of milk processing.
Eventually, they decided to take the leap. Stutzman partnered with Schwartz, Kuhns and one other individual, who later dropped out. Miller came on board about a year and a half ago.
All of the financing came from private individuals—no banks or government loans.
"They asked me, 'How soon can we expect a return?' and I said, 'I have no idea,'" Miller said. "But they gave it because this is something the community needs."
The farmers raised enough money to build an addition to Stutzman's milk house, purchase equipment and get the processing operation up and running. They began installing the infrastructure last May and bottled their first milk in October. Stutzman said the total investment was roughly $750,000.
Miller emphasized this is a pilot project. They intentionally started out small so they could develop a market. As sales grow, more investors will be added. The hope is to scale up, expand the product line and open a retail location.
Currently, the operation uses only 10 percent of the milk produced by Stutzman's herd.
"We're not taking the community's milk today or next year, but maybe in five years," Miller said. "Once we have a market going, then we can show this is working, then we can get more investors for a bigger plant. So, we're looking to just grow this thing into something bigger."
Right now, the farmers are producing about 4,000 bottles per week. They run the production line twice a week, with each of the four farmers providing the labor. They also have two employees.
Kuhn said the farmers put in long days, ranging from five to 12 hours, depending on how smoothly things go. He said they stay as long as needed so they can wrap up their work and thereby avoid having to return the next day. One day, they hope to move to regular hours of operation.
In addition to being a dairy farmer, Kuhn maintains an apple orchard and produces cider, jams and jellies. That experience makes him the most qualified person to supervise the bottling operation and perform quality control. In the early days of the project, he experimented with different pasteurization methods for milk.
Miller handles much of the business affairs, including accounting and regulatory compliance, but he also oversees the pasteurization and antibiotic testing.
Miller, Kuhn and Schwartz all maintain active dairy operations back at their respective farms. They say they couldn't possibly keep up with those responsibilities without the help of their wives and adult children, who run the farm when they're away.
Last Friday, Stutzman, who goes by the nickname "Junior," milked cows in the morning before making the transition from dairy farmer to packing house worker.
Everyone who enters the plant follows strict sanitation rules.
At first, the farmers' marketing plan involved knocking on doors and asking retailers to offer their product on the shelves. That strategy was successful with local, independent grocers like Woodies in Bremen, Al's Supermarket in LaPorte and Michigan City, E&S in Shipshewana, Miller's IGA in Wolcottville and Rite Choice in Nappanee. Amish Country's milk products also appear at Rise'n Roll bakeries and also at a handful of convenience stores.
The farmers are now working with a distributor to expand their reach. They also have a Facebook page and hope to debut a website in the near future.
Last Friday, Stutzman and Miller were thinking of the future while packing boxes filled with strawberry milk.
"Hopefully, someday we'll have a processing plant and a little retail store," Stutzman said. "I don't know – what do you think, Leon?"
"Maybe make our own ice cream and have an outlet for it," Miller said in response, then added, "Just grow larger as we go along in this journey."
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