The Jones family of Richlands Dairy looks with optimism to their creamery’s first year of business in 2019. The $1.7 million investment intends to overcome an industry cycle of low commodity milk values and keep four generations living and working on the farm their ancestors founded in the 1700s.
Per capita, Americans drink less milk than they once did, contributing to milk values dipping below the cost of production. Some of Virginia’s most determined dairy farmers have responded with everything from education efforts that encourage milk consumption to a diversified business venture that adds value to their milk.
Regardless of many 16-hour work days, these farmers can’t turn a profit by traditional means.
“We just can’t keep on making milk, sending it to a cooperative and accept what they’re willing to pay us,” says Hugh Jones, a dairy farmer who owns Richlands Dairy with his family in Dinwiddie County. “We’ve been break-even to losing money since 2014. As of summer 2018, we’re losing about $1.34 per cow per day, or $10,000 to $12,000 per month.”
Daughter Coley Jones Drinkwater says that she, her brother, T.R. Jones, and his wife, Brittany, changed the business model in order to save the farm. They invested in an on-farm creamery to pack and sell their own milk and ice cream. The family hopes to tap into agritourism patrons as other sources of supplemental income.
“We’re staying in business long enough to get the creamery up and going to pay our farm a fair price for our milk,” Drinkwater says. “The goal is the creamery will ultimately keep the farm in business.”
State Supports Dairy Farm Retention
Fauquier County dairy farmer Ken Smith entered the retail ice cream business to add value and brand his milk. Today, locals know the family’s Moo Thru Dairy shop as a roadside destination for ice cream, shakes and milk at the intersection of U.S. 29 and 28.
The Virginia Department of Agriculture and Consumer Services (VDACS) guides dairy farms like these to resources that support growth, business diversification and value-added products, says Stephen Versen, with VDACS.
Some of those opportunities include the U.S. Department of Agriculture Value-Added Producer Grant Program and the Virginia’s Finest and Virginia Grown programs. In addition, the Governor’s Agriculture and Forestry Industries Development (AFID) Fund exists to support new and expanding businesses that commit to buy and add value to Virginia-grown products, including milk.
Since 2012, six dairy-related projects have received a total of $565,000 in AFID funding, including a $20,000 grant in 2018 for the construction of the Jones family’s Richlands Creamery. These grants have collectively leveraged almost $100 million in new capital investment, the creation of 193 new jobs and a commitment from these companies to purchase more than $41.4 million of Virginia-produced milk.
“Our dairy farmers have struggled with commodity milk prices, and the AFID Fund is a powerful tool to help these dairies transition to creating higher value-added products to access new markets and to create an opportunity for the next generation to stay and live on the farm,” Versen says.
Homestead Creamery of Franklin County received the first-ever grant given from the AFID Fund in 2012. The $60,000 grant set in motion a major expansion of the creamery. Scheduled for completion in 2020, the $1.15 million project triples the creamery’s prior capacity and already has added nearly 25 employees.
The business started in 2001 with family and friend business partners who desired to add value to their milk and target a niche market. Today, they package and sell 16 flavors of milk in glass bottles, offer home delivery and market 38 varieties of ice cream.
“This all started so that we could sustain the family farm,” says Donnie Montgomery, one of the founders and owners. “That was our goal.”