Eastern Iowa dairy finds success as dairy industry changes

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HUDSON, Iowa (KCRG) - Large-scale dairy producers are facing difficulties in a changing market for milk.

Hansen's Dairy in Hudson, Iowa said they have found success since producing their own products as other small Iowa dairy farms close. Photo: Wednesday, Nov. 13, 2019 (Aaron Hosman/KCRG)

In early November, Associated Milk Producers Incorporated, or AMPI, announced that it will end production at its eastern Iowa plant. It also said since 2008, Iowa has lost 50 percent of its dairy farms. And on Tuesday, America’s largest milk producer, Dean Foods filed for bankruptcy.

The Iowa State Dairy Association said dairy farmers in Iowa are having to change the way they operate to stay open. The owners of Hansen’s Dairy in Hudson said they have found success, despite tough times for others.

“We produced our first gallon of milk in 2004 to sell to the public,” Jordan Hansen, with Hansen’s Dairy, said.

15 years ago, four brothers started processing their own products on their 150-year-old family farm, making butter, ice cream, cheese and more.

“With the number of cows that we had and selling the milk to co-op and getting the raw milk price that fluctuates with the market, wasn’t going to be enough to support all of the family,” Hansen said.

Hansen said business is now great. They own two of their own retailers and supply products to over 50 vendors.

“Because of the fact that we process our own milk and we kind of get to set our own prices and things, we’re a little bit insulated from what happens around the rest of the dairy industry,” Hansen said.

Last year, Dairy Farmers of America said total dairy sales dropped over $1 billion dollars from the year before. They attribute some of that decline to dairy alternatives on the market.

“You have a lot of choices in the dairy aisle these days with milk and non-milk counterparts,” Hansen said.

The Iowa State Dairy Association said only about 10 percent of decreased milk consumption is due to dairy alternatives and that 94 percent of U.S households still buy milk.

Mitch Schulte, the Executive Director of the ISDA, said fluctuating dairy prices are one reason Iowa’s dairies are going sour.

“We’ve went through several years of low milk prices which has caused dairy farms to change the way they produce milk or unfortunately make the decision to leave the industry,” Schulte said.

Schulte said independent, smaller dairy farms are incorporating more technology to become more efficient. The Hansens said going independent can also help small dairies keep milking.

“It’s certainly a way that you can kind of control the long-term prices, as long as you are comfortable with marketing it yourself sand like I said, having a whole new set of challenges,” Hansen said.

The Iowa State Dairy Association said there is hope for Iowa's dairies as cheese and butter sales are at an all-time high and the demand for lactose-free milk products is growing.