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Indiana seeks more processing to grow dairy industry in state

Editor’s note: In our series, “From Cow to Curd: A Look Across the Nation,” Cheese Market News takes a look at the cheese and dairy industry across the United States. Each month we examine a different state or region, looking at key facts and evaluating areas of growth, challenges and recent innovations. This month we are pleased to introduce our latest state — Indiana.

By Rena Archwamety

MADISON, Wis. — Indiana is an ag-friendly state with a wide range of farm sizes and commodities produced. According to the Indiana State Department of Agriculture (ISDA), it is the tenth-largest farming state in the nation, with more than 80 percent of land in Indiana devoted to farms, forests and woodland.

“Agriculture is an $11 billion industry in the state — not a small sector. We’re blessed with good soils, and a good environment,” says Bruce Kettler, director, ISDA.

“We call our state the ‘crossroads of America.’ It’s got interstates crisscrossing from all corners and all sides,” Kettler adds. “And not just roads, but also good railroad access. We can ship grains in and out to other areas of the country. We even have ports on Lake Michigan and the Ohio River.”

While Indiana’s top commodity is corn, it also has a solid dairy processing sector and ranks second in the nation in ice cream production. The state has 55 dairy product processing facilities, with major plants belonging to Nestle, Prairie Farms, Dean Foods, and others.

Indiana has 825 Grade A dairy farms and 12 manufacture grade farms, according to the Indiana State Board of Animal Health.

“We’ve got some really great dairy farms in all parts of the state, and the northern third of the state has the majority of the farms,” says Doug Leman, executive director, Indiana Dairy Producers. “We do have some pretty good resources in the state. There definitely is feed availability — the majority grow their own or are working with their neighbors. Further south you can get higher temperatures and humidity. But I believe technologies are starting to help overcome that. We definitely run the gamut when it comes to size, from very small farms to very large farms.”

Indiana Dairy Producers is a dairy farmer membership organization that represents about 70 percent of the cows in the state. It works as an advocate for farmers in farm and regulatory issues and hosts meetings and educational opportunities for producers.

Leman notes that Indiana dairies face similar challenges as other Midwest farmers, struggling from poor markets that have forced many out of business.

“In 2018 we lost about 10% of our operations, and we’re on track again in 2019 to repeat that,” he says. “The normal would have been in the 4-5% range.”

• Dairy Strategy

To help provide a greater market for Indiana’s milk producers and increase the volume of dairy processing in Indiana, ISDA in 2015 launched the Indiana Dairy Strategy with support from then-Lieutenant Gov. Sue Ellspermann.

“When the strategy got started, it became apparent that we had a lot of milk — about 4 million pounds a day — going outside the borders of Indiana to heavy fluid markets in the East and Southeast parts of the United States,” Kettler says. “When they noticed that, it really became a driver for the strategy to say, OK, that’s fine, we’ve got a lot of milk. Let’s look at ways to take advantage of that, keep milk inside Indiana and add some value to it, making cheese, yogurt, or bringing fluid processing back to Indiana.”

Several successes have come out of the Indiana Dairy Strategy, Kettler says. In 2017, Prairie Farms launched an $8.7 million expansion of its processing facility in Fort Wayne, Indiana, thanks in part of incentives offered by the state strategy. The investment involved a 22,500-square-foot expansion that included a new processing system, storage, packaging lines and equipment to allow the company to add jobs, manufacture new specialty products and expand its distribution footprint in the United States and Central America.

Walmart in 2018 opened its first milk processing facility in the country with its Fort Wayne plant that processes fluid milk for around 500 Walmart stores in Indiana, Illinois, Michigan, Ohio and Kentucky. The milk for this plant is sourced from nearly 30 dairy farms in Indiana and Michigan.

“Walmart is one that gets a lot of attention. They opened just over a year ago, and it was the first food processing plant in the world that Walmart looked to undertake,” Kettler says. “A total 300 jobs were created with that facility, and it’s in Fort Wayne, near most of the dairy cattle in the northern third of the state.”

The latest success story from the Indiana Dairy Strategy is a cheese plant that opened this summer. Owned by a team of fourth-generation cheese producers from Italy, the Golfo di Napoli plant in Warren, Indiana, is 30,000 square feet and will produce Mozzarella, Burrata, Ricotta, Provolone and other cheeses from organic milk using traditional methods. The specialty cheeses are being distributed to high-end restaurants as well as some major stores in the Chicago area, Kettler says.

The Indiana Dairy Strategy has seen interest from cheese processors, yogurt and other dairy segments in addition to fluid milk, Kettler notes. The program also looks for ways to knock down barriers to help dairy companies grow and expand, and works with other departments and organizations to promote and explain what is needed for dairy and ag to thrive in the state.

“Part of the strategy is to look for ways to add value to milk,” Kettler says. “As we think about what that looks like, part of my role is to help the Department of Agriculture work in dotted line fashion with the Indiana Economic Development Corp. We’re looking to grow and expand businesses of all types in Indiana.”

The Dairy Strategy’s efforts have helped stem the tide of Indiana’s milk flowing outside its borders to almost none, and the long-term strategy is to have enough processing capacity that milk needs to be brought into the state, Kettler says.

• Small-scale cheese

Specialty and small-scale cheesemaking also has grown in Indiana. Though it does not receive state support like the larger dairy plants recruited by Indiana Dairy Strategy, these cheesemakers have worked with each other and local food and dairy organizations to help promote Indiana cheese.

Tulip Tree Creamery, an Indianapolis cheesemaker that specializes in small-batch, European-style cheeses, opened in 2014. Its award-winning cheeses are sold both locally and nationally.

Co-owners Laura Davenport and Fons Smits met when they worked together at Traders Point Creamery, also in Indianapolis. After helping to launch Ludwig Farmstead Creamery in Illinois, they returned to Indiana to start their own cheese business.

“Fons is from the Netherlands and has over 25 years of cheesemaking experience,” says Davenport, who manages the company’s sales and marketing. “He comes up with some really unique ideas.”

The company’s most popular creation is Trillium, a triple cream, bloomy rind cheese that has won awards at the U.S. Championship Cheese Contest, American Cheese Society and Good Food Awards. Other offerings include washed-rind, Blue and flavored varieties. It also collaborates with local breweries to make its Hops beer cheese.

“In Indianapolis, we sell the Trillium styles a lot. Most of our fresh cheese is moved here. Our washed rinds move faster on the East and West Coast,” Davenport says. “Indianapolis has been great to us as a specialty cheese company. Definitely sales are continuing to grow. Locally we’re getting into more retail shops. Kroger just picked us up in Indiana and Kentucky.”

There are several other specialty cheesemakers in Indiana, many of which started around the same time as Tulip Tree Creamery, Davenport notes. Capriole, which specializes in goat milk cheese, started in the late 1980s and was one of the first in the American artisan cheese movement. Jacobs & Brichford, Caprini, and Risin’ Creek Creamery are among other Indiana cheesemakers that have emerged within the last 10 years.

“We communicate and try to bring awareness of Indiana specialty cheeses together. We don’t try to compete, but we share that there are several nice cheeses being made in Indiana,” Davenport says.

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