Management

Banking on cheese to break crippling price cycle

By Stephen Cooke

A decision to make cheese in a bid to “escape the Californian milk pricing system” has seen a fourth-generation dairy farm awarded World’s Best Cheddar at the World Cheese Awards in London on three occasions.

Fiscalini Farms, which milks 1500 cows at Modesta in California’s Central Valley, won the award for its Bandaged Wrapped Cheddar. It now sells a variety of cheeses throughout northern America and London.

General Manager Brian Fiscalini, the great-grandson of John who established the family dairy farm in 1914, hosted a group of New Zealand dairy farmers as part of the California dairy tour held in conjunction with the company’s One Conference.

Brian said they began cheese making in 2000 in a bid to “escape the Californian milk pricing system”. A boom or bust milk cycle, punishing State environmental regulations and rising taxes due to booming property prices fuelled by the growth in almonds, is making it more difficult for Californian dairy farmers.

“There either seems to be too much milk or not enough,” Brian said. “We’re not confident California will fix the system.

“Here you need to get real big real fast or change the revenue market from fluid commodity milk to cheese.”

Cheese sales now make up 30% of their revenue and the aim is to grow this to 100%, eschewing investors so they can maintain complete control.

“4-5 years ago we were using 7% of our milk, now we’re almost at 15% of milk used.”

The dairy and cheese business is run separately. However, under US laws, the cheese business must buy their milk at market prices from the dairy.

“Until we use 50% of the milk we produce, we can’t engage in a contract. We have to pay what the market is,” Brian said.

“California is a very hard place to do business. There is a lot of regulation and a lot of laws are not pro-business. Dairies are going to South Dakota, Idaho and Nevada to expand.”

The herd comprises 95% Holstein, 5% Jersey and a handful of Brown Swiss (owned by a long-standing employee) and 1500 cows are milked three times a day.

Cheese is made from Jersey and Brown Swiss milk (based on butterfat component) with Holstein milk sold to Nestle. A variety of cheeses are now sold throughout northern America and London.

The herd average 42 litres (94lb) with 3.8 fat and about 3.2 protein. The Holsteins average 42 litres a day, the Jerseys 30 litres (67lb) and the Brown Swiss anywhere between 31 and 36l (70-80lb). Their highest six cows produce about 67 litres (150lb) a day.

Brian is looking to increase the average milk by 900ml (2lb) every year “and we’re happy with one pound (0.45 litres)”.

They were the third farm in the country to adopt genomic testing when they started utilising the technology in 2009. Every heifer is tested when born at a cost of $44/head and 10-15% of every cohort tested is culled.

There are four diets utilised for cow groups. The cheese cows receive a higher fat diet, and slightly more protein. The total mixed ration (TMR) comprises 20 different ingredients, including the milk cow mineral, “which has another 20 minerals”.

Other than alfalfa hay, they grow all their forage, which is 70% of all feed required.

“We triple crop, corn is planted now, then there’s a short season of sudan grass, then winter wheat, which we chop."

Employment is a major problem in US dairy with no immediate solutions on the horizon but Fiscalini Farms is bucking the trend.

Brian said he starts each of his 42 employees on a “career path”.

“When we first employ people, some say in two years they want a new career,” Brian said.

“One guy wanted to be a truck driver. All employees receive two days off each week so we sent him to truck school to drive a truck.

“He went, looked at how many hours he would work and what he would make, and realised he would be better off here and stayed.”

Brian said when employees decide to leave he knows the end date and with two months remaining begin to recruit.

Every employee is from Mexico and two long-standing staff members were first employed by Brian’s grandfather 30 years ago.

They have 42 employees in total and Brian sits down with each staff member individually every quarter. Their performance is reviewed and they are eligible for a pay rise or guided on how to improve facets of their performance.

The tour revealed California is becoming an increasingly tough state to dairy but the Fiscalini family’s willingness to look outside the square and pursue new options is giving their business every opportunity to defy the system.

Alltech funded Stephen Cooke's attendance at the Alltech ONE Conference and tour to California.