A Small-Scale Goat Cheese Business

Learn how one farm family earns a comfortable living from its small-scale goat cheese business.
By the MOTHER EARTH NEWS Editors
January/February 1982
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Nubian goats are great milk-producers, which make them ideal for small-scale dairy operations.
PHOTO: FOTOLIA/DEJAN STANISAVLJEVIC
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Probably every back-to-the-lander has dreamed about making his or her homestead pay its way. These monetary ruminations tend to crop up at two times: while the would-be entrepreneur is either pouring out pounds of expensive feed to contentedly munching, "freeloading" livestock or climbing into the car, probably before daybreak, to commute to a necessary but unrewarding job in the nearest metropolis.

Well, the fact is that some folks actually have broken that "live on the farm, work in the city" cycle and earn respectable incomes from their small homesteads. For example, Gerald and Suzanne Aiello — owners of Belle Terre Farms in the rolling countryside near Orange, Virginia — have figured out a way to make their herd of 40 Nubian dairy goats pay for the farm's upkeep, provide capital for additional building and development and furnish an income for the couple and their two daughters. The keystone of this successful homestead business is a cheesemaking program — modeled on similar farm-based operations in Europe — through which the Aiellos turn out a tangy feta cheese from raw goat's milk. The undertaking has the potential of bringing in a net income of $30,000 or more a year.

Of course, Suzanne and Jerry didn't just drift into this profitable farm business. Rather, their success is the result of what they half-seriously refer to as their five-year plan: a carefully plotted homestead management program in which the Aiellos' long-range goals for Belle Terre were meshed — after a good bit of planning and research — with the resources at hand (consisting of a small herd of sleek Nubians and the entire family's willingness to work).

Brainstorming How to Make Money on a Homestead

Like most owners of small-scale dairy herds, the Aiellos were quick to recognize that the market for milk is diminishing — a trend that started in 1964 and doesn't seem likely to reverse. (In fact, one dairy journal has estimated that the goat's milk requirements for the entire state of Virginia could be fulfilled by one 120-doe herd!) So, several years ago, instead of trying to sell their surplus milk, Jerry and Suzanne decided to put it to work on their farm by using the liquid as feed to raise veal and pork for sale.

Unfortunately, both of these ventures proved to be so labor-intensive that the family decided the revenue gained was not worth the time required to bring it in. In the veal-raising enterprize, for example, each milking doe could feed two calves a year. A day-old calf cost $120 and was milk-fed for 60 to 80 days. About 80 percent of the calves were sold privately for about $400 apiece, or $3.50 per dressed pound. The remaining animals were peddled at the livestock market where a calf would all too often sell for not much more than the price Jerry and Suzanne had paid for it in the first place.

Obviously, then, the veal operation's cash flow was poor — and death losses, which amounted to one or two calves a year, were devastating to the small-scale program.

Some sharp-pencil figuring convinced the Belle Terre owners that, even if they increased their herd size and were able to find enough customers who wanted milk-fed veal, the operation's gross would still not produce much in the way of net profit. It would be an enormous drain on the family's time. The swine-raising scheme turned out to be pretty much the same story. ("We found that hogs just weren't compatible with our lifestyle," Jerry comments.)

Deciding to Start a Cheesemaking Operating

That's the situation the Aiellos found themselves facing in 1978: They had 55 acres (more than half of which was nurtured-back-to-health pasture), a carefully bred herd of proven milk producers and a growing dissatisfaction with the notion of raising livestock for slaughter.

About that time, Jerry saw an article in Hoard's Dairyman that described the University of Minnesota's Farmstead Cheese Program. Simply stated, this program — which was implemented in 1976 — encouraged owners of small- to medium-sized dairy cow herds to set up farm-based cheesemaking operations (such enterprises have been common in Europe for many years) and sell the products retail. The initial cost of establishing a cheese plant was estimated at a steep $30,000 — but the farmers who made the investment found ready customers for their wares. Moreover, the dairy operators were no longer plagued by the triple problems characteristic of small-scale milk producers: finding a market, storing the milk and arranging for its transportation to a processing plant.

The article jolted Jerry.

"Bells went off in my head," he recalls. "I figured that there wasn't any reason the program couldn't be scaled down to goat-size."

Upon further investigation, the Aiellos decided they had the raw material to establish their own cheesemaking operation: the Nubians, a 17-by-35-foot cinder-block building (then used as a goat barn) that could be turned into the "factory" and a firm conviction that it would be possible to whittle the capital costs down to a manageable sum.

Rules and Regulations of Making Cheese

Jerry's first job was to find out what steps were required for the operation to comply with Virginia Department of Agriculture dairy regulations.

"The agriculture folks were fantastic," Jerry said. "They assigned a dairy inspector to work with us and that man realized, from the outset, that we weren't going to be a large-scale dairy plant. We were just a small operation on a family farm."

The inspector adapted and interpreted some of the existing regulations to fit Belle Terre's circumstances. Further along in the project, he even helped the Aiellos design the facility and track down equipment for it. Encouraged by the agriculture department's receptive attitude, Jerry then tackled his next big task: building a barn to house the goats that were to be evicted from the cheese plant-to-be.

In August of 1978 Jerry started to construct a 50-by-80-foot goat barn. His plan — which included provisions for hay and grain storage, pens for kidding and weaning, feeding troughs and a large lounging area — was designed to allow one-person construction. Two storage sheds, placed at opposing ends of the barn, support a free-span trussed roof. The result is a handsome, functional 125-goat structure built at a materials cost of $7,000.

Once the goats were moved into their new shelter, Jerry was free to begin turning the cinder-block shell into a cheese factory. First, the dirt floor was dug out, drains were set and a concrete slab was poured. Then, to comply with regulations requiring all aspects of the cheesemaking operation to be physically separated (even though the compartments could be under the same roof), Jerry partitioned the building — using six-inch concrete blocks — making a four-station milking parlor, a milk storage room, a cheesemake room and a receiving vestibule.

The vestibule was designed to satisfy the requirement that, in the event the Aiellos someday decide to buy additional milk for cheesemaking, they have a separate room to receive the "imported" liquid. Furthermore, the regulations also specified that none of the rooms in the actual factory could open into each other. As a result, the 10-foot vestibule contains four doors.

"It looks a little weird," Jerry admits, "but we comply with the rules."

In addition to keeping the costs down by doing his own construction, Jerry was able to save money by making some wise buys on used equipment. A 150-gallon refrigerated milk storage container was bought, used, from a small dairy for $250 (it would have cost $2,500 new). The double-walled stainless steel cheesemaking vat is actually a second refrigerated storage tank, purchased for $150. Jerry resourcefully replumbed the unit and installed a 5,500-watt element to heat the water that's circulated between the vat's walls.

Milk is transferred from the storage area to the cheesemaking room by means of a circulating pump (it was bought used, too) and Tygon tubing (purchased new, at an excruciating $5.00 a foot). In compliance with dairy regulations, the wall opening through which the tubing is inserted can be capped, so the milk storage and cheesemaking rooms are fully separated.

After checking into the cost of new coolers in which to age the cheese (the best deal was $5,000 for an unassembled unit), the Aiellos purchased the body of a refrigerated truck for $700 and paid a mechanic another $100 to set the "box" in working order. Stainless steel sinks, a water heater, drain lines, epoxy paint and wall coverings and other necessities were bought after judicious comparison shopping. In all, the total cost of remodeling and equipping the cinder-block building for cheesemaking came to around $10,000.

How a Goat Cheesemaking Operation Works

The future cheese magnate of Orange, Virginia (with the assistance of his wife, and daughters Amy and Jessica) hand-milks 20 does a day, a chore that requires 1-1/2 hours each morning and evening. The dairy product — collected in stainless steel pails — is poured into the refrigerated storage tank. When the tank is full (at least once a week), Jerry pumps all the milk through the tubing into the cheesemaking room's vat. He heats it to the desired temperature, adds the rennet and cultures, cuts the curd with special stainless steel knives and drains off the whey. Then, all the Aiellos pitch in and pack the feta into pint-size glass jars, affix attractive blue-and-red "Belle Terre Farmhouse Cheese" labels (which they designed themselves) and store the containers in the cooler for the 60-day aging required by law. The entire process yields about 200 jars per cheese run of crumbly, tangy white feta.

The decision to make feta — rather than another type of cheese — was not lightly arrived at. From the beginning, the Aiellos were determined to use raw goat's milk.

"We'd originally hoped to produce Gouda," Jerry said. "But then Suzanne came up with the idea of feta, which is traditionally made in Greece from sheep or goat's milk."

Feta turned out to be a good choice because it doesn't require the expensive cheese press and additional labor (brining, turning, paraffining and so forth) that Gouda needs.

"The feta is a one-day cheese," Jerry points out. "When we finish packaging it and put it in the cooler, we don't have to look at it again until we deliver it two months later."

The Bottom Line With a Small Dairy Business

Since they were unwilling to invest the time required to staff a farm-based retail store, Jerry and Suzanne decided to sell their feta through a wholesaler. For each pint jar, they receive $2.50 or roughly 50¢ for the jar and label and $2.00 for the labor, utilities and other expenses related to producing the milk. Jerry figures that Belle Terre's feta wholesales for about $2.66 a pound. Therefore, because approximately five pounds of milk will yield one pound of feta, the Aiellos receive about 53¢ per pound for the milk produced by their Nubians (or roughly double the amount the raw liquid might sell for).

After their 60 days of aging, the cheese-filled jars are packed 12 to a case and delivered to a wholesale food broker in Richmond, Virginia. The feta is then shipped to grocery chains for retail sale.

By manufacturing a relatively low-labor cheese, Jerry and Suzanne have been able to minimize production costs. This fact makes it possible for them to wholesale the product at a figure that allows the stores to add their usual markup and still put the feta on supermarket shelves at a price competitive with that of most commercial cow's milk cheese.

The Aiellos believe that once the Belle Terre operation is in full swing, the feta should net about $3,000 a month, which translates to about $1,000 of annual income per doe. (In contrast, during the veal-raising venture, the Aiellos earned about $300 per milking doe each year.)

A Profitable Small Dairy Business

Careful herd management is an integral part of Belle Terre's five-year plan. From a foundation of seven registered Nubians, the Aiellos have built up a milking "core" of 20 does. They hope to increase the total to 25 during 1982 and to 30 — the maximum practical number that they can hand-milk — by 1983.

The breeding program is arranged to allow a 305-day annual lactation period during which each doe produces an average of 2,000 pounds of 5 percent butterfat milk. This schedule permits the family to take a break from cheesemaking during December and January (and gives the animals a rest, as well).

Does are bred beginning in September and most of the kids are born from mid-February to mid-April. During the past few years, the couple has carefully upgraded the herd by purchasing quality bucks from the West Coast (they have four now) and they've achieved an average of just under three kids per doe during each breeding season.

In 1981, about 60 registered Nubian kids were born. Of these, 15 young does were selected — on the basis of their conformation and milk-producing potential — to be added to the Belle Terre herd. Another 20 or so does were sold for between $250 and $300 apiece.

Of the 20 or 25 buck kids born, seven or eight quality animals, expected to become good breeding stock, were sold for between $300 and $400 each. The other bucks were auctioned at the livestock market (at a loss) for about $25 apiece. Jerry and Suzanne try to market their kids before the animals reach two months of age, in order to avoid running up prohibitive feed and shipping costs.

The Aiellos estimate that each doe brings in $500 each year from kid sales — an amount that just about equals her upkeep!

You can see, then, that the sale of registered stock is an important part of Belle Terre's income . . . and the Aiellos anticipate grossing as much as $15,000 annually from this facet of their enterprize over the next few years. They emphasize that any homesteader who's seriously thinking about starting a goat herd should purchase registered animals with an eye toward future income from the sale of offspring.

The Future of Dairy Farming

As mentioned before, Jerry and Suzanne designed their cheese plant to comply with the regulations concerning purchased milk in case they decide to expand their operation and need more raw material than their herd can supply. If the feta sells as well as anticipated, they plan to start buying additional milk in 1982.

The Aiellos are already licensed to buy milk, and — during August 1981, when a MOTHER EARTH NEWS staffer talked with them — they expected to base the price they'll pay for raw goat's milk on the liquid's butterfat content. (The butterfat percentage is a fairly good indicator of the milk's protein content, and hence of cheese yield.) Jerry estimates a cost of perhaps 25¢ a pound for 5 percent butterfat goat's milk.

Although it's likely that many small-scale goat owners would choose to sell milk to Belle Terre rather than invest in their own cheesemaking facilities, the Aiellos would like to see more homesteaders making farm cheese. According to their calculations, it would require a herd of about 20 does to reach the break-even point. At the other end of the spectrum, 30 seems to be the maximum number of does that a family-sized operation can manage without bringing in additional help.

The idea of competition doesn't bother the Aiellos at all.

"On the contrary, I think it'd be great if four or five farms in Virginia were to start making different varieties of goat's milk cheese, perhaps under one label, so that there would be an entire product line," Jerry asserts. "It would help the state's goat industry immensely."

If such a venture came to pass, it could lead to cooperative advertising and marketing — both of which can be quite expensive for a single homestead operation.

How to Make a Homestead Business Profitable

At this point, small-farm owners who've tried fruitlessly to start homestead businesses are likely wondering exactly why Belle Terre is having the success that's eluded other enterprises. There seem to be several very good reasons.

"We had a plan for each year and learned what we needed to know before we did anything, Jerry says. "Second, we had no outside labor costs. Third, Suzanne, who is a physical therapist, has continued to work while I ran the farm ... her income financed the venture and we could eat. Fourth, we took a business-like approach by establishing our cheesemaking operation to conform with dairy regulations and that helped us gain the support of our banker."

Finally, the Aiellos aren't afraid to look into the future and see where they want to be — or to invest time and energy researching their goals. Their five-year plan just may be the key to finding success on 55 rolling acres in Virginia.


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Post a comment below.

 

DJ
5/23/2011 7:10:45 PM
My wife and I are in the third year of our licensed cheese making goat dairy. (We also make cow cheeses using milk from another nearby dairy.) It looks like we may make a profit this year - wahoo! With increased demand for artisan cheeses, and with reasonable planning and a lot of frugality, a cheese making business can succeed. I figure if we're doing okay in this lousy economy, we must be on to something. And it's a great time to buy used equipment.

rose watson
1/23/2010 1:02:05 PM
I am very interested how things are going for these people. I would like to start this type of business in Canada, I am concerned about the legalities. I would love to hear from someone!

Randy Dowd_2
12/24/2009 4:40:12 PM
Yeah I too would like to hear how these folks are doing in 2009

Denise Henry
1/8/2009 1:04:01 PM
I am very curious as to where how the cheese business is going for the Aiellos's. The article was written in 1982...where do they stand today in 2009? I have been interested in becoming involved in the dairy goat business. I would love to hear there sucess story.








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