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Mid-Atlantic sees growth in artisan, commodity business

Editor’s note: As part of 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 states — Delaware, Maryland and New Jersey.

By Rena Archwamety

MADISON, Wisconsin — The Mid-Atlantic states of Delaware, Maryland and New Jersey are home to a range of dairy processing activity, from artisan goat’s and sheep’s milk cheesemakers to large bottling and converting facilities owned by major cooperatives and corporations.

The number of dairy farms in these states, as in other parts of the country, continues to decline as costs rise, cities encroach and older generations retire. According to the most recent numbers from USDA, dairy cow and licensed dairy herd numbers in all three states are down compared to a year earlier. For 2017, USDA’s National Agricultural Statistics Service reported an average 30 dairy farms in Delaware, 400 in Maryland and 55 in New Jersey.

“For Delaware, and a lot of New Jersey, as urban pressures increase, farms are going to decrease,” says Jerrel Heatwole, chairman of the Dairy Farmers of America’s (DFA) Northeast Council and vice chairman/treasurer of DFA’s corporate board. “Clearly the number of farms will continue to decline as there’s urban encroachment. The more people around, the more regulatory issues you face. Farms are going to continue to get larger.”

Heatwole, who milks 65-75 cows outside Greenwood, Delaware, about 25 miles south of the state’s capital Dover, notes that his farm is in the Chesapeake Bay watershed, which adds extra regulations. Heatwole also has to go out-of-state to access suppliers and services for his dairy equipment. On the positive side, though, dairy farms in the state can grow much of their own feed. The region also has plenty of processing capacity and demand for milk from many high-population centers.

“In the Mid-Atlantic region, we probably have more processing capacity demand than actual milk produced,” Heatwole says. “Demand for our milk hasn’t been an issue.”

• Dairy processing

In 2011, Delaware’s two major dairy processors, Hy-Point Dairy and Lewes Dairy, merged. The combined company, which still uses the two separate names, remains the only major dairy processor in the state, producing butter, milk, ice cream, cream and eggnog. Delaware also has four dairy farms that produce ice cream on a smaller scale, as well as another small dairy that bottles its own milk and sells it at farmers’ market and a few local markets, according to the Delaware Department of Agriculture.

Maryland has more than 50 licensed dairy processors, including a Saputo Dairy Foods plant in Frederick, Maryland, and two facilities owned by Maryland and Virginia Milk Producers Cooperative.

Maryland and Virginia Milk Producers, which has 157 members in Maryland and four in Delaware, notes that it recently modernized both of its Maryland facilities, which include a fluid milk bottling plant in Landover and an ingredients/balancing plant in Laurel.

“At the Landover facility, we added a caseless filling line that we commissioned in spring 2017,” says Amber Sheridan, director of corporate communications, Maryland and Virginia Milk Producers Cooperative. “At our Laurel ingredients facility, we expanded our drying capacity by making modifications and upgrades to our dryer. The Laurel plant is a significant balancing plant for the region and processes milk from several states, though mainly Pennsylvania and Maryland.”

New Jersey has four Grade A commercial fluid processing plants, as well as one on-farm Grade A processor and one state Grade A processor for yogurt, the New Jersey Department of Agriculture says. The state also has 16 cheese processing plants that processed 5.4 million pounds of cheese in 2017.

DFA, which has about 100 farmer members in Delaware, Maryland and New Jersey, last fall acquired Bridgeton, New Jersey-based Cumberland Dairy, a family-owned processor of ultra-pasteurized dairy products with extended shelf life (ESL). DFA notes that Cumberland Dairy manufactures and distributes both branded and private-label products and serves some of the nation’s top quick-service restaurants, convenience chains, grocery chains, wholesale food distributors, fine-casual restaurants and dessert concepts.

“This is DFA’s first acquisition in the ESL space, and we think there is opportunity to grow our work with customers and existing product lines through ESL,” says Pat Panko, senior vice president and chief operating officer, fluid milk and ice cream, DFA.

• Artisan cheese

One of New Jersey’s most visible artisan cheesemakers is Valley Shepherd Creamery, Long Valley, New Jersey, which makes cheese, butter and yogurt from the milk of its 600 sheep, 220 goats and 50 cows.

Additionally, the 20-year-old farmstead operation hosts tours, teaches cheesemaking classes and sells its products from its on-farm Sheep Shoppe and its retail and grilled cheese counter in Philadelphia’s Reading Terminal Market, as well as other regional retailers.

“Agritourism is pretty big at the farm here, especially spring and fall,” says Eran Wajswol, owner and cheesemaker, Valley Shepherd Creamery. “We have a tourism center with guided tours and wagon tours. Our cheesemaking classes are always sold out. It’s a very active farm.”

Outside its own shops, Valley Shepherd Creamery cheeses are sold mainly in retailers on the East Coast, though it recently expanded and launched national distribution of its line of sheep’s milk yogurt. The creamery also is working to expand its Jersey Cow cultured butter to meet increasing demand, and it has increased its wholesale accounts for cheeses.

“We’ve been growing from the day we opened. My wholesale person tells me there hasn’t been a week without two or three new customers ... it never seems to stop,” Wajswol says.

Running a farm and processing operation isn’t easy in the suburban landscape of New Jersey. Feed production and procurement, waste management and stringent inspections are among the challenges, Wajswol notes. However, the area’s population also provides a close and constant customer base.

“Demographics is great. The price you pay for being here is getting the demographics,” Wajswol says, adding that the proximity of his customers has made it possible to deliver most of his product without hiring a distributor.

Goat’s milk artisan cheesemaker FireFly Farms also has grown over its 17 years in Accident, Maryland, and the company now is planning an expansion into a second aging, processing, lab and office space over the next couple of years.

FireFly owners Michael Koch and Pablo Solanet left their respective corporate and culinary careers started making cheese from their own goats at their farm in the western Maryland mountains. Eventually they sold their goats to focus exclusively on cheesemaking, and now they source all their milk from six old-order Amish family farms within 20-25 miles from the creamery.

“We’re in northern Appalachia, and just 11 miles north of us is the Pennsylvania border,” Koch says. “We don’t have any trouble (sourcing milk). Actually, we can’t grow as fast as our farmers would like us to grow.”

FireFly Farms’ main market is in the D.C. metro area, with concentration in the Mid-Atlantic and the Northeast. However, the company’s cheeses also are now being distributed as far as Northern California, the Midwest and Florida. FireFly has done business with Whole Foods Market since 2003, and recently was asked to create exclusive, limited-run cheeses for the chain.

“Once we grow and build our new place, we will have more manufacturing and aging space,” Solanet says.

“Our business plan has us going from about 200,000 pounds a year to about three times that size in the next five to eight years,” Koch adds of the planned expansion.

Koch is president of the Maryland Cheese Guild, which has been in existence since 2011 but has had more momentum in the past two or three years, he says. The guild holds an annual festival, which took place earlier in October, in conjunction with the state’s wine guild. The cheese guild now has 28 members, including 10 that have achieved a large enough scale to be “paying” members.

“I’m hoping the mountains of western Maryland look like Vermont in 15 years,” Koch says of the growing interest in artisan cheesemaking. “There’s talk about whether in the future to expand the Maryland guild, whether we should combine forces with Pennsylvania, or maybe there should be a Mid-Atlantic guild.

For the meantime, we’re pleased the Maryland guild has formed and are trying to drive as much growth as possible with the cheesemakers who are here.”

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