How to Start and Manage a Micro Dairy, Step 12: The Business Model We Chose

Reader Contribution by Steve Judge
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Over the years, I’ve learned that there are many ways to successfully manage a traditional dairy farm. But managing a Micro Dairy and holding a full-time job (which was a necessity to help support my family)at the same time created unique problems that required clever solutions.  Here are a few basic guidelines:

1)  Keep the cows clean, dry and comfortable.

2)  Keep the milking and milk handling equipment spotless and sanitary.

3)  Cool the milk as quickly as possible.

4) Extend the lives of the cows by keeping them healthy and happy.

I found that the close-to-home production of safe and delicious farm-fresh milk is frequently overlooked by the local food movement. Dairy is often considered too big and industrial to be thought of as local. But, almost every neighborhood corner store, convenience store and deli sells fluid milk. Obviously, the demand is there, even though most commercially processed milk suffers from serious and documented flavor defects. If I could produce better tasting milk with a longer shelf life, I could sell it locally for a premium, but fair, price. The key would be selling my milk for retail prices directly from my farm or by making limited deliveries to cooperative pick-up locations. I could never afford to pay a distributor to deliver my milk for me. Instead, I’d have to follow the laws of supply and demand.

I decided to milk three or four Jersey cows, each producing approximately five gallons of milk per day. Factoring in a two-month dry period for each cow every year, my weekly milk production would average around 100 gallons. I felt confident that I could sell that much milk for $6 to $8 per gallon, the going price in Vermont for farm-fresh milk.

To solve my time limitations, I chose to buy a used pipeline to milk my cows and a small bulk tank to quickly cool my milk. I didn’t have time to clean buckets or fool around with ice baths and milk jugs. When it came to bottling my milk, I knew that washing glass jars would be very time consuming so I decided to sell a one-gallon stainless steel milk tote to each of my customers for their milk. It would be their responsibility to return the totes to me clean and ready for a refill. My plan was to fill milk totes on Wednesday, Saturday and Sunday mornings and leave them in the refrigerator for self-serve pickup.

My business model took an unexpected turn when I made the fateful decision to explore selling pasteurized milk directly from my farm in order to expand my market and reduce liability concerns. And, oh yes, as an afterthought, I decided to invent a low input – low impact tabletop HTST pasteurizer. And now, seven years and a lot of blood, sweat and tears later, it looks like I may have finally accomplished my mission with the help of a whole lot of very talented people now or formerly associated with Bob-White Systems, Inc.  

When I set out on my Micro Dairy venture, I would have never guessed that I would end up bringing the LiLi to market. By sticking to a sensible and realistic business model, I was given the freedom to take a risk and explore new pastures. While the goals have changed slightly, my model still revolves around efficiency, my customers and making safe, delicious, farm-fresh milk readily available for local communities. 

Please visitwww.LiliMilk.comfor more information.

Have a great fall and winter.