Value-Added Growth is Key to Some Dairy Operation Successes

Posted on Jul 1, 2020

Turning milk into profit-making, value-added products is helping some
dairy farm families carry on multi-generational traditions

The dairy industry has a long and storied history in the Commonwealth; one that is steeped in tradition and can be traced back for generations. In fact, if you ask any dairy producer why they continue in such a demanding sector, they will likely list tradition as one of their deciding factors.

Taking that into consideration, coupled with the growth of value-added products and the local food movement, many dairy farm families are finding new opportunities by turning their milk into a variety of dairy products and selling straight from the farm.

Terry Rowlett and his family, who are long-time dairy farmers in Henry County, have taken the step of creating Rowlett’s Milkhouse Creamery, finding new uses and customers for their dairy milk.   

“My father and our family moved to this farm in 1974, and it was a dairy at that time,” he said. “In addition to the dairy, we also grow about 50,000 pounds of tobacco, about 100 acres of corn for silage for our dairy, and we cut approximately 1,500 rolled bales of hay each year for our cows. With what we own and what we rent and lease, we're farming close to 1,000 acres.”

Most Kentucky farms have operated in a diverse manner for years, but as the tobacco-growing economy shrank, the need to find new ways to sustain family farms became more prevalent.

Rowlett is simply adding to an operation that was already diversified, but this venture brings customers a little closer to products from the farm; a trend that has seem growth over the past several years and has significantly expanded in the wake of COVID-19.

“In December 2019, things started looking up for the dairy industry and prices began to improve,” he said. “It seemed like some of the trade negotiation deals had come through, and we were moving more milk or dairy products off-shore. Plus, dairy farmers had cut back a little bit.”

But things changed for most of the agriculture industry when the virus struck, and the economy slowed to a crawl.

However, the decision made about the expansion of their dairy business by Rowlett, his sister Sharon, who is co-owner of the farm, and wife Sandra, came well before the coronavirus.

“We decided by the end of 2017 and early 2018 that we had a choice; we either had to add some value to our milk somehow, or we were just going to have to quit the dairy,” he said. “For lack of better words, our bills were a lot higher than our milk check.”

The Rowletts decided to create an off-farm store where customers could buy such products as cheese, ice cream and butter. As part of that decision, they invested in pasteurization equipment to ensure they could use the dairy milk coming straight from their farm.

“We are taking milk that may not have made a profit and are turning it into products that will,” said Rowlett.

Carl Chaney and his family saw the need to diversify their dairy operation many years ago and are continually striving to improve upon what likely turned out to be a farm-saving enterprise.

“This dairy was started in 1942 by my father, James Riley Chaney, who milked over 20 cows a day by hand,” he said. “And over the years, he grew the dairy as technology advanced. He loved the Jersey breed and won many awards for his efforts in breeding top Jersey cows.”

That love for the breed and the industry was passed on to Carl, who bought the herd from his father in 1985. But the dairy industry hit some difficult times,  and Carl, along with wife Debra,  and their three children, all of whom were – and still are – very involved in the farm, knew something had to change.

“With more housing developments pushing toward the farm, doing business as usual with the dairy was just not going to be sustainable, and we felt like we didn't want to have to struggle so much as we did when we were just milking cows,” he said. “Milk prices are so cyclical: they're up and then they're down for quite a while, and then they're up a little bit, and then they're down again, and it's just frustrating to work every day, as hard as you work, to just continue pushing uphill.”

In 2003, the decision to start Chaney's Dairy Barn was made, which created a farming destination of sorts complete with for tours, local food, and what has now become world famous ice cream.

Since then, the Chaney family has continued to move forward, first investing in a new barn to optimize cow comfort, and a state-of-the-art Lely A4 robotic milking system. But the latest change could prove to be the biggest so far.

Chaney’s youngest daughter, Elizabeth, made the move in 2017 to begin the process of being able to pasteurize the milk on their farm allowing them to sell fluid milk, make value added products, and most importantly, provide an ice cream mix to Chaney's Dairy Barn.

This latest investment to the business has yielded great results, so far. Chaney said there have even been times when local groceries have sold out of their milk.

“We've been so blessed that people have continued to support us and help us,” he said. “We're open at the Dairy Barn and things are going pretty well. We're running about 45 to 50 percent of the sales from last year because of the situation with the coronavirus, but we're excited to be open. We're tickled that our employees have jobs and that they can count on that money to help with their families.”

Chaney sees a chance for better days ahead with milk prices on the rebound and the world opening up again, but it has been the hard work and dedication of his family (and families like his) that has helped the dairy industry continue to be a vital part of the Commonwealth’s agriculture industry.