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Milking more cash from a dairy farm


MIDDLETOWN - Randy Sowers is betting $790,000 that the processing plant and retail store he has built on his Frederick County dairy farm will help him break the economic cycle that has done in so many of his colleagues.

He's counting on long lines of consumers driving up to his operation - the first of its kind in Maryland - and paying a premium price for bottled milk and other farm-fresh products that, he said, "taste at lot better than what you can buy in the stores."

"There's no doubt about it, we are putting everything on the line," the 47-year-old farmer said as he sat on a green folding chair in the back room of his South Mountain Creamery store on Bolivar Road, a few miles west of here. He laughed and added: "A lot of people ask, 'You sure you're not crazy?'"

The store stocks a variety of dairy products, included whole, skim and 2 percent fat content milk. There are bottles of chocolate- and strawberry-flavored milk.

There's yogurt and an assortment of cheeses, including smoked cheddar, Swiss and Portelet.

And lots of flavors of ice cream, which has proved to be so popular that the store was nearly sold out Monday morning, the day after last weekend's grand opening.

The Creamery offers something else that many baby boomers haven't seen since they were kids - home delivery.

"My husband, Paul, thinks this is the best-tasting chocolate milk he has ever tasted in his life," Karen Walker, a Middletown resident, offered as she wrote a check for the milk and eggs that she had bought. "The milk is so fresh. You can look out the window and see the cows being milked."

S. Patrick McMillan, an assistant to the state agriculture secretary, said the South Mountain Creamery is a unique operation in the state. He said it is an alternative that other farmers may need to boost their profits and pump new life into Maryland's rapidly declining dairy industry.

Maryland has lost 30 percent of its dairy farms since 1991, due primarily to the low price farmers are paid for their milk.

"Farmers have got to look at adding value to their products," McMillan said. "It's a way they can make more money and survive the downturns in the milk industry."

South Mountain Creamery is an operation that will be watched by every other dairy farm in the state, said James Hanson, an agriculture economist with the University of Maryland, College Park.

"Dairy farms are under a lot of pressure, and the farmers have been waiting for someone to take the risk and open a processing plant," he said.

Randy Sowers said he got the idea of building a milk- processing plant and going head-to-head against some of the largest supermarket chains from a magazine article nearly 10 years ago.

"We saw this article on this farm, Country Dairy, in New Era, Mich., that had its own processing plant," Sowers said.

"We [Sowers, his wife, Karen, and their two children] got in the van at four in the afternoon and drove all night," he said. "We got there in the morning. We wanted to see what that was all about."

They liked what they saw.

"At that time they were only bottling milk," Randy Sowers said. "They had an open house, and 1,500 people showed up the first day."

Country Dairy farm started out 18 years ago milking 80 cows and bottling milk, said its owner, Wendell Van Gunst. Today, he said, they milk 900 cows.

"The business keeps growing," Van Gunst said. "We will do $5.5 million in sales this year." He declined to say how much the farm will earn, but said the processing plant "is quite profitable."

As the Sowerses drove home, there was much discussion as to whether or not they could do here what Van Gunst did in western Michigan.

The Sowerses felt they had to try something new. Too many dairy farms in Maryland were falling victim to low milk prices and going out of business.

"We were working 18 to 20 hours a day and we could hardly keep the bills paid." Randy Sowers said. "We were getting 75 cents a gallon for our milk, and in the stores it was selling for nearly $3 a gallon. Something had to change."

But they didn't jump into anything. They waited, a little nervous about taking the big leap.

The family gained some reassurance last year when Karen Sowers attended a daylong dairy conference in Frederick sponsored by the University of Maryland and the state Department of Agriculture.

Farmers from 12 states heard that they would have to turn their milk into butter, cheese or ice cream to fatten their pocketbooks. They also were told that the same urban sprawl that had caused them problems represented a potentially large and viable market for fresh-from-the-farm products.

It was all the encouragement Randy Sowers needed. He took their business plan to the Manufacturers and Traders Trust banking office in Frederick and borrowed $790,000 as part of a $2.9 million refinancing of his entire farm operation.

"Debt doesn't bother me," he said. "When I started this business I didn't have anything. I'm not going to lose sleep over it. I might be better off if I lose the farm and get a 40-hour-a-week job."

Scott A. Rankin, a dairy food specialist at the University of Maryland, said the Creamery could find it difficult wringing dollars from families pinching pennies to buy milk from the supermarket. But, he said, its products could appeal to two-income families in the region who would like to have home delivery of products fresh from the farm.

The Creamery charges $2.09 a half-gallon for its milk. Stores in Middletown and Frederick sell milk for about $2.39 a gallon.

Can the Creamery compete? "That's the $64,000 question," said Rankin. "I applaud his entrepreneurial boldness."

Randy Sowers is counting on it more than his courage.

By bottling his milk and selling directly to the consumer, he said he gets more than three times what the co-op pays. "That's the gist of our business plan," he said.

He drew confidence from the steady flow of shoppers last weekend. "At one time we had 40 people outside waiting to get in," said Arlene Atkins, a neighbor who stopped by to help.

Randy Sowers said the store posted sales of between $800 and $900 on Saturday and another $650 on Sunday.

He said his biggest seller was chocolate milk, "but we sold a lot of hand-dipped ice cream over the weekend."

Sowers conceded that he may not get rich off the farm processing plant. "Our goal," he said, "is that when we set down at the end of the month and write the checks to pay the bills, there is something left."

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