Cheese plant boosts local economy

 

Three Italian-style cheeses, Romano, Asiago and Parmesan, have been perfected in the small town of Hoven, S.D., population 400.

Kevin Hageman, division manager of Associated Milk Producers Inc. in Hoven, said some people say the cheese plant is “the state’s best kept secret,” but he has found that many in the state are aware Hoven has an award-winning cheese plant and are very inquisitive about the operation.

Hoven Cheese started making cheddar cheese in 1962. Cass Clay purchased the plant in 1983 and started making hard Italian-style cheese wheels in 1986. In 2007, it became a farmer-owned cheese plant, part of Associated Milk Producers Inc., based in New Ulm, Minn.

Cheese made at AMPI’s Hoven plant placed first in its class at the National Milk Producers Federation annual contest last year. Hageman proudly said the cheese also was named the most distinguished at the 2009 World Dairy Expo Championship Diary Products Contest with overall grand champion, the first time Italian-style cheese had won the contest.

“What makes the end result different from a cheese in Wisconsin, New York or California is the quality of the feed that is fed to the animals that produce the milk,” Hageman said. While the shape and texture of cheese may be the same, the differences come from the quality dairy herds in the area.

Dairy cows need a consistent source of nutritious feed in order to provide milk. “As the diets of cows in different regions differ, the result is different flavors in milk,” Hageman said. He said high quality feed with an emphasis on alfalfa and other forages produced by the AMPI members around Hoven is what gives the cheese its distinctive flavor.

The market for Italian-style cheese has doubled in the last 10 years, according to Hageman. “The business is very sound. It does well and will continue to do well with the great staff we have,” he said.

Making cheese

At Hoven, the daily cheese making process starts with 350,000 pounds of milk delivered by seven semi-trucks from AMPI dairy farmers and regional dairies, Hageman said. It takes 14 days for the milk that enters the plant to leave as cheese. The cheese mixture is hand-shaped into 22-pound round wheels which measure 13 inches by 4 1/2 inches deep. After the product is hand pressed, it is placed into a mold. The wheels are put in brine which helps to develop the flavor. It is wrapped in plastic and ready to be shipped to Wisconsin where it is aged. The Hoven plant produces 12 tons of cheese each day.

It is recommended that, at the minimum, the Asiago ages for 6 months; Romano for 5 months and Parmesan for 10 months to allow the cultures in the cheese to develop the flavor.

After the aging process, AMPI customers package and sell the cheese under a variety of private labels primarily distributed in the eastern United States, Hageman said. While the cheese produced by the plant isn’t available for purchase in Hoven, Hageman said it is best enjoyed with red wine, beef and poultry.

Impact on community

Generations of families, many with hard-working German ancestry, work at the plant. The cheese plant has a strong presence in the community with the company providing support for many of the activities in the town and the school, Hageman said.

Hageman said statistics show the dairy industry has declined in the last 20 years, but it is now growing in this area. Recently, the state of South Dakota has been recruiting dairy operations in the state, with a July USDA report showing an additional 9,000 dairy animals in the state in the last year. Cows have been added to dairies in the area, and that is good news for the Hoven facility.

Economically, where the milk goes, jobs follow. Hageman said the plant, with a workforce of 35, provides a substantial benefit to the town. In addition to providing and distributing a nutritious product, Hageman said the dairy industry generates substantial economic benefits at the local, regional and national levels through employment, local tax revenue, and purchases of products and services. One dairy cow generates $14,042 of economic impact on a community each year according to the South Dakota Department of Agriculture.

Hageman started as a part-time temporary worker in 1991 after going to college. He moved through the plant and now oversees operations as the division manager. His family has a long history working within the cheese business in Hoven.

Hageman said that the best thing about the job is working with the employees. The quality of the plant is maintained by the many long-time employees. Lorraine Hoffman is one of those, greeting visitors and answering the phone for 53 years. The plant operates one shift per day, six days a week. Many workers begin their day at 3 a.m.

AMPI has employed several graduates from the dairy manufacturing program at South Dakota State University. The cooperative works with the school and also collaborates with the Midwest Dairy Food Research Center, University of Minnesota, Iowa State University, national and regional dairy promotion groups and industry organizations.

Hoven’s mayor, Jack Feldmeier used to work at the plant and praised the plant for the opportunities it provides to the community.

“The cheese plant is the biggest employer in Hoven and also the biggest user of water and the city lagoon,” Feldmeier said. “Cheese is big, but it’s still the farmers, the people who till the land and raise the animals who are very important to the community. Workers come from Gettysburg, Selby, Bowdle and Faulkton to work here. They buy gas and spend money. That’s all very important to the economics of our small community.”

Impact on cattle herds

The proposal to build Ringneck Energy in Onida, 50 miles away, could provide a source for additional feed for those looking to expand or relocate dairies. At a meeting in Aberdeen last week, Walt Wendland, president and chairman of Ringneck Energy & Feed, LLC, said the proposed ethanol plant could provide a quality feed for dairies and beef operations in the area. He said he realizes the importance of having a consistent product for dairy animals and the distillers grains from the plant could be used to enhance the rations on dairy operations.

AMPI member James Schaible milks about 100 cows near Hosmer, S.D. He started using modified wet distillers grain from the Glacial Lakes Energy ethanol plant at Mina this spring and thinks it works well in his dairy operation.

“The main reason was to cheapen up the ration,” Schaible said. “We started in May as we had some pretty dry silage from last fall, and this added moisture. It’s a good fit for the cattle, and the cows really clean it up. I work with my feed man to come up with the right mix. We watch it pretty close and only add so many pounds per animal. What we’ve picked up has been real consistent.”

The use of distillers grains seems to be working well with a good gain and production, he said.

If an ethanol plant is built in Onida, Schaible said it’s a long way from him. His operation is 45 miles from Hoven. But for those with operations closer to Hoven and Onida, it could certainly be a good source for feed. And it could be something to bring more dairy operations to that area of the state.

Schaible has beef cattle in addition to his dairy. Now that he’s used distillers grains for the milk cows, he said he’ll probably start using some distillers grains when the beef cattle come off pasture in the fall. “With the price of distillers way down, it’s a good fit for us,” he said.

Cattle producers add value to grain by moving it through livestock. As prices rise and fall for animals and grain, the struggle between what’s right for grain and livestock producers continues with many bumps along the way.

Vern Rausch of Hoven carefully watches the trends and feels confident that the cattle industry ebbs and flows in a seven-year cycle.

The price of cattle compared to corn swings back and forth. A few years back, when corn was close to $8 and pastures were torn up to plant corn, many animals disappeared from pastures, and prices were low, Rausch said. Now the cycle has swung back with high prices for cattle and low prices for corn. Prices for animals are higher when the herd is increasing because there are fewer animals on the market to buy and sell.

“We’re seeing the market spike as high as we’ve ever seen it,” Rausch said. “We’re watching the changes and living it. We know hard times bring the good times.”

Rausch said building an ethanol plant at Onida could be a good idea and a good investment, especially for those in that area. Rausch sees a lot of trucks moving corn from that area, so if a plant could add value and provide a feed product for area beef cattle and dairy operations, that could be positive. Timing will have a big impact, as he believes the industry will follow the cycle rather than react to the expansion of the ethanol industry.

“We’re now in the second year of an upswing in the cattle market,” he said at the ranch last week. “Many factors come into play and could change the picture in a few short hours.” Rausch said that one announcement of a grain sale can send the markets into frenzy. That can be a game changer and can temporarily throw off the cycle.

“We think we are at the center of the world, but we are not,” Rausch said. “Brazil has more cattle than we do. They don’t have the infrastructure. I’ve heard of a number of forward-thinking people buying land in Brazil. Having people invest there can have a big impact on the cattle market here.”

As livestock producers are enjoying good prices, there are always factors on the horizon that could kill the market. When mad cow disease was discovered, it was a serious concern and killed the market for a significant amount of time and delayed the cycle.

According to Gary Taylor, Associate Professor, SDSU Economics Department in an Aug. 18, 2016 posting to iGrow.org, the beef industry continues to provide a significant contribution to the economic health and growth in South Dakota. In 2012 the beef industry provided an estimated total economic impact of $4.48 billion, 12,571 full-time equivalent jobs, and a net positive tax impact of $613,762.

In addition the beef industry provides a market for an estimated 44.2 million bushels of corn, 9.8 million tons of forage, and 34.5 thousand tons of soybean meal. The beef industry is expected to continue making a positive contribution to South Dakota’s economy in the foreseeable future, especially in the presence of low beef supplies and high beef prices.

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