Iowa Public Television


Small Dairies Create Market for Entrepreneurs

posted on April 13, 2012

 PLAINFIELD, Vt. (AP) - Frank Kipe thought he had everything he

needed to launch a business selling what he described as the

world's most expensive ice cream: two Jersey cows, a 10-acre farm

and an old barn.

     Then he found out that he would have to pasteurize his milk

before making his ice cream. Equipment for commercial farms was

bulky and cost tens of thousands of dollars, so he built his own

pasteurizer. Then he built more to sell. His pasteurizer business

boomed, and the ice cream was forgotten.

     With small dairies popping up nationwide to meet the growing

demand for locally produced food, the market for equipment for

five-cow, 10-sheep and 20-goat operations has grown, too. Major

manufacturers long ago gave up producing equipment for small

dairies, which seemed to be a thing of the past, leaving the field

open for entrepreneurs like Kipe.

     He sold two small pasteurizers the first year to his milk

inspector's other clients. In the six years since, he has sold

about 160 to dairies in about 30 states along with Bermuda, Kosovo

and Australia. He expects to sell up to 80 this year, installing

them himself with his wife. His biggest markets have been New York,

Pennsylvania, Texas and Vermont.

     "The key thing is to be flexible," Kipe said, "so that's why

we designed our pasteurizer, for example, to work as a legal

pasteurizer. But it will also work as a cheese vat, it'll also work

as a kefir or yogurt incubation vat, and it will even work as a

small bulk tank to store the milk until you are ready to process."

     Pasteurization is a process in which milk is heated to kill

disease-causing organisms. Federal law requires milk and most other

dairy products to be pasteurized before sale to the public.

     Kipe's system, sold by MicroDairy Designs in Smithsburg, Md.,

includes a large vat where milk is heated to 145 degrees for 30

minutes. Another system designed by a Vermont farmer pulls the milk

through a heater at a gallon per minute, warming it to 161 degrees

for 15 seconds before it is quickly cooled.

     "For probably 30 years there wasn't a market for these very

small operations and now there is a market and so now we're

starting to see the equipment coming in," said Dan Scruton, the

Vermont Agency of Agriculture's dairy section chief. "Some's being

imported, some's being developed around the United States and in


     Sharon Peck and her daughter Kim Ingraham invested about $16,000

in one of Kipe's pasteurizers about two years ago to process milk

from their herd of about 50 Nigerian dwarf goats at Willow Moon

Farm in Plainfield, Vt. Their model has two different-sized inserts

for the vat, allowing them to process 15 to 35 pounds of milk at a

time for their fresh chevres and feta.

     "It's really nice for us because this time of year we have much

less milk, so she's able to use the smaller vat," Peck said. "And

in another few weeks she'll swap that for the bigger one because

she'll be in full swing for the season."

     About half of Kipe's customers make cheese, and he said most

make a variety of products, including yogurt, kefir and flavored

milk drinks.

     Steve Judge and five investors spent more than $1 million and

six years to develop the Bob White Systems pasteurizer, which they

hope to get approved for sale in Vermont this summer and then

expand to other states.

     Judge, who milks four cows that produce about 20 gallons of milk

a day in South Royalton, said the system was designed to fit

dairies like his, which produces enough milk to supply about 60

families on a regular basis. He plans to sell it for about $35,000.

     His company also sells bulk tanks, small milking equipment and

livestock supplies and is developing small butter churns and

bottlers. Sales grew by nearly 40 percent last year.

     "Because that end of the market is so underserviced, because

everybody just gave up on it," Judge said.

     He plans to set up a free demonstration pasteurizer at Jersey

Girls Dairy in Chester, where Lisa Kaiman hopes to one day bottle

her own milk and make sweet cream butter and ricotta and mozzarella

cheeses. With pasteurization, she can diversity her products and

sell to local chefs and the public, earning more than if she kept

selling milk wholesale.

     There's a "huge potential," Kaiman said. "I can move all my

own product. I can move all my own milk. I don't have to rely on

anybody else."

     While even small pasteurizers are a big investment for small

farms, Peck said she wasn't concerned about losing money because

she figures she'll be able to sell the equipment if she gets out of

cheese making.

     "Used dairy equipment is snatched up pretty quickly," she



Tags: Dairies entrepreneurs pasteurize small businesses