Case Histories of Grass-Fed Market Development in

the Upper Midwest

Laura PaineGrazing & Organic Agriculture SpecialistWisconsin Department of Agriculture, Trade & Consumer Protection608-224-5120Laura.paine@wi.gov

National Small Farm Conference, September 15-17, 2009

Growing grass-based farming

• Supporting graziers’ efforts to develop markets for grass-fed products.

Grass-Dairy Projects

Grass-fed dairy product research

Grass-based Dairy Marketing Case Histories

Available soon at ww.cias.wisc.edu

• Farmstead– Cedar Summit Creamery– Otter Creek Farm– Saxon Homestead– Uplands Cheese

• Cooperatives– Edelweiss Graziers– Paradise Prairie Graziers– PastureLand Coop– Still Meadows– WI Dairy Graziers Coop

• Existing Companies– Alto Dairy Coop– Grass Point Farms

Management intensive dairy grazing

• 30 days• 30 paddocks

• Why Grass-fed?– Economics– Environment– Quality of Life– Healthier meat & milk?

Healthy fats in grass-fed products

• Multiple studies have documented:– Higher Conjugated

Linoleic Acid (a nutritionally important fatty acid).

– Lower Omega 6/Omega 3 ratios

– Higher Vitamin A– Higher Vitamin E(Clancy 2006)

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Grass-fed Confinement

CLA in milk from WI Farms

Data from Pearson et.al. 2000

Marketing claims used with grass-fed products

• Environmentally friendly• Humane animal treatment• Nutritionally healthy (CLA,

Omega 3s)• Supports family farms• Food safety issues (E.Coli/factory

farms)• Local, know the farmer• ‘Natural’ claims, including rBGH

free, antibiotic free.

Do features associated with grass-fed translate into perceived consumer benefits?

Survey responses Feature Benefit Very

Important Somewhat Important

Environmentally friendly Clean water, wildlife 64.6% 28.2%

No antibiotics or hormones Healthier for me 63.2% 24.1%

Humanely raised The animal didn’t suffer

to produce my food 62.7% 28.8%

Family farm Supporting farm families with my purchase 29.2% 33.2%

Raised in my state (MI) Supporting local

economy, smaller carbon footprint, etc.

23.1% 29.2%

Knowing the farmer Trust in how the product was made 16.8% 17.3%

Increased CLA, Omega 3s, Vitamins A & E Healthier for me Question not asked

Data from Connor, MSU, 2006

TMR

G+G

GBC

Grass-fed is different2005 comparison of grass-fed and conventional cheddar cheese at UW

• Conventional stored feed diet

• Grass-fed with grain• Grass-fed, no

supplement

Investigating the chemical and physical differences in grass-fed milk

SARE Research Grant$148,000 over three years.

• Participants– Researchers– Farmers– Processors– Chefs

• Activities– Research

– Market assessment– Outreach to farmers, processors, & buyers.

• Comparisons– Grass-fed vs. conventional stored feeds.– Seasonal variation

• Spring flush• Summer• Fall

• Product testing– Whole milk– Cream– Butter– Yogurt– Cheese (next year)

SARE Research Grant

Tasting Event

• Participant comments:– Grass-fed is creamy—melts in your mouth.– Conventional ‘cleaner’ flavor, more familiar,

what I’m used to.– Grass-fed butter has a more ‘complex’

flavor.– Grass-fed brings out the flavors of the

seasonings.– Flavor difference is remarkable.

“Terroir”

Animals

Plants

Soil

Unique flavors

Narrative Marketing

• “The consumer is saying, ‘I want to know the place it comes from. I want to be able to identify with it.’” (Fred Kirschenmann)

• “Consumers no longer respond to companies that speak at them—they respond to companies that speak with them.” (The Hartman Group)

• “The food business is no longer about fast, convenient, and cheap. It’s about memory, romance and trust” (Rick Schneiders, Sysco CEO)

Uplands Cheese Company

• Dairy farm partnership (two families) in SW WI.• Started in 2001.• Use only their own milk.• Researched Alpine cheese types to develop their own recipe.• Make one type of cheese: Pleasant Ridge Reserve. • Won Grand Champion at American Cheese Society their 1st year.

Memory….Romance….Trust

Cedar Summit Dairy

New Prague, MN

• Started in 2001.• Farmstead creamery.• Multi-generational family farm.• Signature product: glass

bottled milk and cream.• Farmers market sales

important tool.

Memory….Romance….Trust

Scaling up toFarmer

Cooperatives

• Five farmers in Eastern WI.• Formed in 2001.• Contracted to make cheddar cheese.• Won award for cheese spread.• Disbanded in 2007.

Memory….Romance….Trust

PastureLands Cooperative• Four farmers in SE Minnesota.• Formed in 1998.• Contract with various processors to

make several kinds of cheese and butter.

• Butter has won awards in American Cheese Society contest.

• Currently developing new artisan cheeses.

Large Existing Dairy Processors

• Grass Point Farms • Alto Dairy

Lessons learned….What’s creating challenges?

• Milk variability.• Milk handling and pooling.• Commonplace foods, like fluid milk and cheddar

cheese.• Starting out with a national marketing campaign.• Focusing marketing on health benefits.• Investment in facilities.• Timing.

Lessons learned….what’s working so far?

• Do your own marketing.• Have a unique signature product,

a compelling story.• Do your own processing, or find

like-minded processing partners.• Minimize initial investment.• Start local and small.• Timing.

Saxon Homestead Creamery

• Memory—a good flavor, a good experience

• Romance—a good story• Trust--consistency

Can grass-based dairy be an economic development strategy for rural communities?

• Pasture based dairying– A 250 acre pasture based dairy can generate an annual

income of $225,000.– 60 to 100 cows can provide a comfortable living for a

farm family.– A farm that is compatible with urban development.

• A dairy farm generates– $15,000 to $17,000 in economic activity per cow in the

local community.• Dairy processing plants provide jobs and generate

revenue for rural communities.

Resources for Dairy Artisans

• Participants– UW Extension & UW CALS– WI Dept. Ag (DATCP).– WI Dept. Commerce.

• Activities– Education.– Technical assistance.– Tax credits.– Low interest loans.

• Non-profit group supported by DATCP.

• Consultant teams.– Business planning– Equipment.– Recipes.– Marketing– Label development.

• Assisting farmers and existing processors.

Additional Tools• University Extension

– Traditional small business development assistance

– Ag and Community Development staff working together (Ag Innovation Counselors)

• Local Economic Development Resources– Tax incremental financing– Revolving loan funds– “Ag Development Zones”

• Private investment possibilities– Angel Investment networks– Badger Ag Vest– Slow Money