Closed Loop Farming and Value Added Products Chapel Hill, NC

15 April 2013

 Closed Loop Farming and Value Added Products Chapel Hill, NC

This April, I had the privilege of touring Chapel Hill Creamery in Chapel Hill, NC. I took away two major lessons from my visit and would like to use this blog post to share them with friends and visitors of the Duke Campus Farm.  First, the potential for selling a locally made “value added” product like cheese.  Second, the major benefits of “closed-loop farming.”  But first, let me set the scene.

Chapel Hill Creamery

The 37-acre operation began with a handful of Jersey dairy cows and has grown to support over 30 Jerseys, along with two oxen, barnyard poultry, and hogs.  The milking parlor has six milking machines and the girls are milked twice a day.  The dairy cows are rotationally grazed, which I saw during my visit.  The girls were roaming across a 2-acre field, quietly munching on luscious ryegrass and lounging in the mid-spring sun while contentedly chewing their cuds.  In my work I have seen hundreds of herds of dairy and beef cattle, so let me say: These were some happy cows. 

Like many states, North Carolina has outlawed the sale of unpasteurized or “raw” milk, meaning anyone who wishes to sell milk must have access to a pasteurization tank.  You can imagine that Flo and Portia who own the farm did not make this sizable investment when they opened their business with just six Jerseys, instead opting to turn their cows’ milk into cheese.  Portia and Flo however, do not make simply one type of cheese from their herd – they now produce and market seven different cheeses. 

Our group sampled three of the Chapel Hill Creamery cheeses.  There is the buttery and creamy “Carolina Moon” cheese that spreads on bread, a raw milk “Hickory Creek” cheese that is full-flavored, and the “Dairyland Farmers Cheese” that is equally moist, smoky, and tangy.  The Dairyland Farmers Cheese was my personal favorite, and while slowly eating it my mind raced with what types of flavorful dishes would benefit from its strong smoky flavor. 

Portia and Flo retail their cheeses at multiple farmers’ markets and sell them wholesale to local grocers like the Maple View Country store and Whole Foods.  At this time their sales are divided roughly 50-50, with half of their cheese being sold directly to consumers at farmers’ markets and the other half being sold at food retailers.  When small farmers market their goods, a mixture of wholesale and retail sales is often preferred because grocery stores purchase in bulk and with consistency (depending on your contract).  Selling retail at farmers’ markets gives the farmer the biggest financial return because they remove the middleman.  By combining the two, local farmers like Portia and Flo can have an income that is profitable and reliable. They also benefit from selling cheese, because it is a value-added product.

Benefits of value added products

So what is a value added product? Basically, it means you take a raw product, process it somehow, and sell it at a higher cost because of the added resources and labor.  For Portia and Flo, this means they milk their cows and then use their cheese-making facility built onto the back of their milking parlor to produce wheels of delectable cheese.  For local farms, value added products can be delights like jams, jellies, pickled eggs, sausages, bacon, butter, yogurt, and yes, even Mapleview ice cream. 

For Portia and Flo, raising a reasonable number of dairy cows was the life they wanted, and selling cheese was the way to make it pay for a number of reasons.  First, they add value and reduce input costs by making cheese on-site, meaning no fuel and transportation costs are added until it is actually time to take cheese to market.  Second, they diversified their product line by selling seven types of cheese, meaning if you don’t like the tanginess of the Dairyland Farmers Cheese you can instead try their 2012 NC State Fair Best of Show Calvander cheese.  Finally, they found a niche market because no one nearby made dairy cheese.  Additionally, there is an ethereal added value some customers receive from purchasing locally made goods from a farm whose animals have exceptional living conditions. 

While the Duke Campus Farm does not sell value-added products, we do have workshops that feature food processing, like with kimchi and kombucha.  The Duke Campus Farm does however practice a closed-loop farming system like Chapel Hill Creamery.

Closed-loop Farming

 To understand the benefit of closed-loop farming, think about all the inputs necessary to grow vegetables or in this example, make cheese. To make cheese you need cows (check), land (check), grass (check), water (check), and fertilizer.  The dairy cows at Chapel Hill Creamery are rotationally grazed which means a large portion of their diet comes from grazing. While Portia and Flo rotate their cows on a very structured system, their manure input will not equal the amount of nutrition they removed from the soil.  So, do they drive down to the local farm store and purchase chemical fertilizer by the ton? Certainly not!

Instead, hog waste is occasionally spread on fields to restore depleted nutrients and organic matter.  The hog waste comes from their own herd of roughly 15 pigs that live on the farm in an outdoor enclosure.  When asked, Portia said that she had never planned to have pigs but it made the most economic sense for their needs.  When she said this, she wasn’t just referring to their waste, but also their diet. 

When Portia and Flo began making cheese they produced a surplus of whey as a byproduct.  In the past farmers would just dump the whey and call it a loss, but the material eventually became classified as an animal waste which means there is now a mountain of regulation about waste-whey.  So, the option emerged: do they install a wastewater treatment system that can properly break the whey down for disposal, or find an alternative way of making it disappear.  They chose the alternative method and invested in hogs hungry for whey.  The hogs consume every drop of whey the dairy cows produce in exchange for some supplemental feed and soft hay bedding, far less demanding than a state-approved wastewater treatment system!  As mentioned, the whey-fed hog waste is put back on the fields to fertilize grass for the cows, plugging a hole where nutrients would have quietly left the farm and increased the rate of soil depletion. 

Once their time on the farm comes to an end, the whey fed hogs are processed at a North Carolina slaughterhouse and then make their way to the customer base.  Whey fed pork is a niche product in the meat market, with more people trying it because they have heard that the meat is better-marbled, more flavorful and produces a more tender hog altogether.

Portia and Flo’s hogs are also another example of a value-added product because whey fed pork is a specialty meat that is hard to find.  If anything were to happen to their cheese income, they also have pork as a secondary source of revenue.  By closing the waste-loop on their farm, Portia and Flo saved tens of thousands of dollars they would have spent on a wastewater treatment system, added an on-site source of animal waste aka fertilizer, and successfully turned a problematic byproduct into bacon. 

Conclusion

At this time, the Duke Campus Farm produces fruit and vegetables and does not have animal waste to use as fertilizer (hog waste cannot be spread near food for humans, just grass for cows).  We do, however, value composting residual plant and vegetable matter.  This way, nutrients that were stored in leaves, stems, and dented watermelons make their way back into the soil for the next crop. 

All in all, I hope that you (readers) are now familiar with the concepts of value-added products and closed-loop farming.  These critical principles of local farming help make ends meet for businesswomen like Portia and Flo, who have more freedom to work on their next gold medal cheese and give more attention to their cows to check for sickness, rather than worrying about the legality of their production’s byproducts and if fertilizer is affordable this year.