HILMAR, Calif. – This month, the talk on coffee row here will be about a new $3 million (U.S.) visitor centre opening soon next to a cheese processing plant down the road.
Each morning a half dozen or more dairy producers get together at their favorite coffee shop – Stacy’s in Hilmar, population 2,500 – about a kilometre from the plant.
They own Hilmar Cheese Company, which has become the largest single-site cheese plant in the world, and the largest producer of Monterey Jack cheese in the U.S.
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Their facility will do more than produce cheese. It will teach people how cheese is made and includes a park, waterfall and classroom for school tours.
It supplies several types of cheese to Kraft, Taco Bell and others in the food service industry. Lactose and protein are exported to the Pacific Rim.
It was around the coffee table at Stacy’s in 1983 that 12 dairy producers first came up with the idea for a cheese plant. The $2.5 million facility was built two years later.
Each producer signed up for various amounts of money, including Jim Ahlem who invested $5,000. Backed by their own farms, the bank then supported the proposal.
Why build a plant? Ahlem said the farmers had Jersey cattle that provide high protein: “We realized the value of the milk.”
He said 100 pounds of Jersey milk can produce up to 13 pounds of cheese.
Farmers wanted to control their own destiny and felt existing dairy co-operatives weren’t paying them their true worth. So they decided to build a plant that could pay for milk with a cheese yield formula providing premiums based on cheese made from that milk.
The company exceeded its five-year projection within 18 months.
Although proud of its success, Ahlem credits part of it to another company shutting down around the same time as his started.
“It would be tough to do again. The timing was just perfect. The cheese industry was just in its infancy, plus 50 to 60 percent of the cheese came from out of state.”
The company has retained 11 of its original owners, and the plant has become two plants plus a whey processing facility.
Millions in premiums
More than 150 dairy operators in the area ship to Hilmar Cheese, which receives more than 4.5 million pounds (1.8 million litres) of milk daily. The plant has paid out $35 million in premiums.
“We never envisioned anything like this, but we felt if we wanted to be competitive, we had to play with the big (companies),” said Ahlem.
About 55,000 cows provide milk to the dairy. Jerseys produce 30 percent of it, while Holsteins provide the other 70 percent.
“We pay the way we wanted to do. We wanted control of the milk.”
Bigger companies supported the cheese company because of dairy producers’ ownership and marketing.
“We look at things differently. We’re willing to take some risks, and most of the money we make here is plowed back in, historically.”
The producers visit customers’ plants to learn what is expected and then tailor products to meet demand.
“If you want higher protein, we’ll give it to you,” Ahlem said.
Despite their success, some things haven’t changed.
“We go to a coffee shop, six or seven of us, for breakfast together every morning. A lot of money business gets done. We share information about everything, and we get along really well … that’s part of the success.”
The group also hired a chief executive officer to run the 250-employee company and the farmers avoid becoming actively involved.
“I don’t have time to come here and stick my nose where it don’t belong,” said Ahlem, who has his own dairy to run.
However, he leads tours through the facility, sharing his knowledge of cheese making from the time the milk arrives in trucks to when the cheese leaves the plant in 42-pound blocks.
Current output is 190 million pounds of cheese annually.
“What did we know about cheese before making it? Nothing. The first cheese I ever made was in here,” said Ahlem.
