Marc Baez to dairy farmers: Diversify or perish

Sullivan County planners have been looking into building a small creamery, hoping to help the county's few dozen remaining dairy farms survive.

Not so fast, says local economic consultant Marc Baez. The Sullivan County Democrat reported last week:

According to Baez’s calculations – using what he termed “very favorable assumptions” – a creamery would be lucky to break even unless it diversified beyond simply processing and shipping fluid milk.

“The economies of scale work against all but the smallest and most specialized operations (e.g. on-farm cheese production) developed incrementally from the ground up or the very largest of facilities such as operated by the major players in the market,” Baez wrote in his report.

“Small- to medium-size operations focused on fluid milk do not work, and even specialized facilities only work at a tiny scale.”

“Your best bet,” he told the IDA board, “is to focus on yogurt, cheese and premium ice cream.”

Baez mentioned Hudson Valley Fresh as a success story. That's interesting, given his views on the viability of  selling just fluid milk -- HVF mainly sells regular old milk (albeit high-quality milk, touting higher butterfat and lower somatic cell counts than industry average). Its success appears to lie not in providing a niche product, but in marketing; HVF sells milk with a story about supporting farmers, open space, local food networks and animal welfare.

Another local dairy venture that's making forays into both cheese-type things and "milk with a story": NYmilk, an all-organic brand that's been gaining some traction on grocery shelves lately. NYmilk co-founder Dean Sparks has got a blog, which you can find here. And here's a Q&A with Sparks and farmer Dan France, on the Mindful Eats blog.