A Survey of Dairy Value-Added Processors

With changing dairy market conditions, many dairy producers are looking for a more reliable, less cyclical income stream. Across Kentucky and throughout the country, more producers are considering on-farm processing to add value to the milk produced on their farms. Like any other business venture, proper planning is imperative to establishing a successful business. However, resource materials for those individuals interested in starting an on-farm processing facility are limited. An effort to fill this void with a comprehensive resource guide is under way. Hopefully, this resource guide will prove useful to dairy farmers across the state. As part of this larger effort, an electronic survey was distributed to over 120 on-farm processing businesses across the United States. Questions focused on cash flow, financing, sources of information used to start a business, and advice given to prospective business owners. When asked to describe the most difficult part of starting the business, the most frequently cited challenge was dealing with regulations (26%) followed by product marketing (19%), manufacturing technicalities (19%), and securing funding (16%). The majority of respondents indicated they were either extremely satisfied (52%) or satisfied (44%) with their decision to start on-farm processing while 3% of respondents were neutral. The most frequently used sources of information used in developing the business were existing processors (87%), books (65%), and the internet (58%). Results of this survey will be used to provide guidance to other producers considering on-farm processing of dairy products