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0608 PD: Iowa dairy produces, markets and distributes its own milk

Loretta Sorensen Published on 14 April 2008

For nearly 150 years, members of Jay Hansen’s family have lived and farmed on Black Hawk County land near Waterloo, Iowa, where Jay and his four sons now work together.

Between the five of them and Jay’s wife, Jeanne, they operate a 175-cow dairy and manage a creamery where they process their milk, their retail outlet stores and distribution of their milk products to a network of area stores. Their entire product is sold within a 25-mile radius of the farm.

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“We are conveniently located for this type of operation,” Jay says. “We’re close to Waterloo. About 80,000 people live there. There are also several other smaller towns – Cedar Falls and Waverly – that are close to us.”

A desire to control his own destiny drew Jay back to the farm after he completed college and taught school for a few years.

“I had a strong desire to be self-employed,” Jay says. “My dad started the dairy here in the early 1950s. Both my younger sons always wanted to work with the cows. The two older boys weren’t so interested in the cattle, when they were young, but we all work together now.”

Although his sons Blair and Blake were fairly certain they wanted to be part of the family dairy operation, Jay asked that they work off the farm for a time in order to help them make that decision. They both worked on dairy farms in Illinois and Wisconsin before coming back to the farm. Brent was a hoof trimmer for seven years, and Brad was a teacher. Lynn, the Hansen’s only daughter, is not involved in the dairy.

Blair and Blake now oversee J&J Dairy and take care of the family’s registered Holsteins that are milked twice each day. Their setup includes a double-eight parallel parlor. Brent and Brad operate the bottling plant, manage the retail stores and oversee distribution and marketing.

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“We’re sort of landlocked where we are,” Jay says. “We don’t have room to expand our herd, and we didn’t see any way to support five families with 175 cows. That’s why we began exploring our value-added options in 2002 to see how we could capture a market for ourselves.”

The Hansen family took two years to complete construction of their bottling plant. A contractor put up the shell, and the family worked together to construct the interior and set up equipment. They began bottling twice each week in 2004. They now bottle three times per week and produce approximately 9,000 gallons of milk.

“We sold milk to [Associated Milk Producers Incorporated] AMPI for years,” Jay says. “When demand for our products grew, we didn’t have enough milk for anything else. We’ve stopped home delivery because the population base here doesn’t really support that. We’ve found a balance now between the prices and our resources so that we’re able to meet the current demand.”

Initially, the Hansen family expected customers would seek out their milk products because they offered home delivery and don’t use rBST.

“We had no idea that people would buy our milk because of its taste,” Jay says. “But that’s what our customers talk about if you ask why they buy it.”

In addition to the whole milk, fat-free and 1 percent milk blends they offer, Hansen’s Dairy also produces cream, cheddar cheese curds, ice cream, butter, ground beef, beef jerky and dried beef.

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“People tell us our ice cream is the best they’ve ever had,” Jay says. “It’s because our milk isn’t homogenized, and we use a process that was used years ago.”

Because their milk isn’t homogenized, customers who purchase Hansen dairy products have to become accustomed to seeing a cream line in their milk bottle and shaking their milk before they drink it. Customers also have the option of purchasing a discount card, like a Smart card, and using that to purchase Hansen dairy products. Doing so nets them a 10 percent discount on their purchases.

“That’s one way to keep the cost of a gallon of milk down to about $3,” Jay says. “We offer other products in our retail stores, too. You can buy eggs, ground beef and beef jerky products. The beef products come from our culled cows, which helps us add value to our dairy operation.”

In addition to their own stores and the network of stores that offer their products, the Hansens provide milk products to a number of businesses such as restaurants, coffee shops and nursing homes. Jay works in every area of the operation, and Jeanne takes care of the bookkeeping and purebred registrations.

Because kids comprise a major portion of their market, the Hansens developed a logo that utilizes a wallaby, which they believe draws interest to their milk products.

“Our mascot is a wallaby with a dairy calf in its pouch,” Jay says.

Dairy tours are regularly arranged by Jeanne and visitors have the opportunity to see the three wallabies that reside at the farm.

As one of four family dairies near Waterloo, Iowa, Jay says they are very pleased with the progress of their business and see the potential for continued growth.

“One of the family businesses here has been around for a long time, and we talked to them when we were starting up, asking about many things,” Jay says. “We’ve communicated with the other two a few times. They started up about the same time that we did. We check to see what the other businesses are doing from time to time, but we don’t communicate on a regular basis.”

While they have no immediate plans to expand their marketing area beyond the 25-mile radius of their farm, Jay says it’s possible they could offer their products outside of that area in the future.

“We have about 10 percent of the market in that radius, so there’s plenty of room for expanding right where we are,” he says. “But it’s certainly possible that we could grow beyond that.” PD

Loretta Sorensen for Progressive Dairyman

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