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Adding value to his own ag products

By Staff | Jun 28, 2012

-Farm News photos by Clayton Rye CORY KITCHEL, 6, and his sister, Kamren, 16 months, gets first-hand experience on the sucking ability of a calf at the Meinders’ Farm Fresh Dairy open house. They are children of Courtney and Robert Kitchel, of Blue Earth, Minn.

BUFFALO CENTER – Bruce Meinders’ dairy farm in Kossuth County is a success story sprouting from improbable roots.

At a time when most dairy farms were struggling to survive or selling off their herds, Meinders started dairying three years ago on the family Century Farm where there was no dairy facility or milking system.

Adding to the uniqueness of starting a dairy farm surrounded by miles and miles of corn and soybean fields, is that Meinders processes his own milk for retail sales from his on-farm creamery under the label of Meinders’ Farm Fresh Dairy. Products include milk, butter and several flavors of ice cream.

His Holsteins are milked by a robot that keeps a record of each cow’s production by sending it to a computer.

Another innovation is his use of custom-designed vending machines to sell milk and butter in towns that are not big enough to support a convenience store. There are currently seven vending machines in use.

MEINDERS’ DAIRY PRODUCTS are sold by vending machines in area towns too small to support a convenience store such as this machine in Rake.

The vending machine in nearby Rake is the one Meinders is watching to determine if selling milk by vending machine can be profitable. Rake, with a population of 200, represents the size of town Meinders believes he can serve while providing a service to the community.

The sales of his products at the Rake location will be used to determine levels of profitability for his vending machines.

Other towns that Meinders is considering as locations for his vending machines are Scarville and Leland.

Meinders is looking to expand his vending machine sales across the state line into Elmore, Minn., 663 population as of 2010.

“You can not buy a gallon of milk in Elmore,” said Bruce Meinders. “It does not have a grocery store or convenience store.”

Once Meinders receives a permit from the Minnesota Department of Agriculture for the sale of fluid milk, he will be able to sell his products there. He anticipates getting the permit soon.

Meinders’ dairy products are available in Iowa grocery stores in Forest City, Garner, Mason City, Thompson, Buffalo Center, Titonka and Algona. Deliveries are made twice a week.

Besides learning from his own experience, Meinders has networked with other small producers willing to help with advice. These producers are located in Iowa and other parts of the United States and have provided Meinders much support and camaraderie.

Now into the third year of his learning curve, Meinders is looking for ways to increase his profit margin.

He said the fluid milk market is high volume with very small margins, putting small producers at a disadvantage with large commercial dairy processors.

A small producer such as Meinders’ Farm Fresh Dairy has to look to customer loyalty, he said, while emphasizing selling a premium product to maintain profitability.

Meinders said he uses a slower method in his milk processing which keeps a better quality that is not used by commercial dairies who want to maintain a high volume.

Meinders has learned that milk customers are price sensitive so he has to keep his prices close to commercial processors to maintain sales.

Meinders is looking to other dairy markets, such as ice cream and butter, where people are willing to pay more for a premium product.

He would like to add his own line of cheese and yogurt to increase sales and profitability. Cheese curds could be sold in his vending machines.

To celebrate its third year of business, Meinders’ Farm Fresh Dairy held an open house. Meinders said 400 people showed up, and he called it a “very successful day.”

“It was a rewarding thing to do,” Meinders said.

Besides touring the barn and creamery, people were given free ice cream cones, served cookies made with butter from Meinders’ dairy and sampled the ice cream flavors.

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