Minnesota's Pastureland Butter Is on the Verge of a Comeback

Fans of the deep-yellow, grass-fed butter from Pastureland dairy co-op have had a tough spring. At several of the Twin Cities dairy cases where it’s usually found – from Seward Co-op to Whole Foods – a big gaping hole has replaced its one-pound packages for the past month. Who knows how many plans for fettuccine alfredo and pound cake and rent-a-movie-night popcorn have had to be shelved for lack of their star ingredient.

But there is cause for (tentative) rejoicing, because Pastureland just started skimming the cream off its milk again, preparing once again to make butter beginning June 7. Pastureland has been able to get its butter back into production because the dairy co-op has finally, after five months of searching, found someone who can dehydrate its skim milk into powder. What does finding a processor for something as bland as skim milk powder have to do with making delicious, decadent butter? A lot, as it turns out.

Butter is kind of a wasteful product, if you think about it. It takes about twenty pounds of milk – that’s more than two gallons – to make just one pound of butter by skimming the cream off the top and churning it. Then you have all that leftover “skimmed” milk that you have to do something with. Fortunately for butter makers everywhere, though, someone somewhere along the line convinced people that this “skim milk” is a palatable drink (a view not shared by myself, but we’ll leave that aside for now). And even if no one’s taste buds had ever been so rudely hoodwinked, makers of whole and reduced-fat grades of milk also have a use for the skim. They employ it to standardize milk so that it conforms to whatever percent of fat is on the package. For example, let’s say you’re a milk producer, and you need to make 2 percent milk. No batch of milk that comes straight from a cow can ever be relied on to be exactly 2 percent fat. So skim can be added to a milk that’s, say, 2.3 percent fat to make it 2 percent.

Butter makers, including Pastureland, need that skim milk market. To stay in business, they need to make money not just from the tiny percent of their milk supply that turns into butter, but from the much larger proportion that turns into skim. (Pastureland also makes some income from specialty cheeses, so that adds to the mix.) Until late last year, that was no problem for Pastureland. But then just before Christmas, Kalona Organics, the milk company in Iowa that bought its skim milk for resale under its own brand, told Pastureland that it wouldn’t be able to take the skim anymore due to the poor market for organic milk during the recession. In other words, Kalona’s sales were down, so it had to cut its supply. And Pastureland struggled for five months afterward to figure out what to do with its skim milk.

Other buyers for the skim milk were sought, of course, but no one within reasonable shipping distance was interested. They explored processing the skim into Milk Protein Concentrate (MPC), a key ingredient in energy drinks and infant formula, but then an MPC manufacturer from New Zealand flooded the market with a bunch of cheap MPC and drove newbies like Pastureland back to the drawing board. They tried to find someone to dry it for them, thus expanding the potential markets they could ship to (dry milk weighs a lot less and takes up less space than fluid milk), but they couldn’t find any takers.

The white knight in this whole ordeal was played by the company that normally separates Pastureland’s milk into cream and skim, Westby Creamery of Westby, Wisconsin. After hearing of Kalona’s decision to cut Pastureland as a supplier, Westby agreed to buy all of Pastureland’s milk through May 1, giving Pastureland some breathing room to find other options. When Pastureland still didn’t have a buyer on May 1, Westby extended the agreement by one month. But Westby couldn’t extend it again, so the heat was on for Pastureland to find a suitor by June 1.

And so they have. Plainview Milk Products of Plainview, Minnesota, has agreed to take one load of skim from Pastureland to test its viability for drying into powder. If the tests go well (and Pastureland’s CEO and Sales Director, Steve Young-Burns, has no doubt that they will), Plainview has tentatively agreed to process all of Pastureland’s skim. Steve already has a customer for the dried skim lined up in Indiana. The rub is that, until Plainview’s testing is over, Pastureland has to sell its skim on the conventional (non-organic) milk market, where it sells for just over $10 a pound. Just for comparison, the market price for organic skim – what they used to sell to Kalona – is about $19 a pound. Pastureland is taking quite a hit on this test in the hopes that it will all work out in the long run.

What if it doesn’t? What will Pastureland do then? No doubt Steve will keep trying to find other options. But in the meantime, co-op members Michelle and Roger Benrud of Benrud Dairy in Goodhue, MN don’t know how they will get by. Maybe they’d have to continue selling milk on the conventional market, Roger surmises, but at half the price of organic, that strategy wouldn’t allow them to survive for long. Michelle says she just doesn’t know. Surveying their 260 acres, so lush and green in this warm, wet spring, she says they just haven’t wanted to think that far ahead. Hopefully they won’t have to.

What has Pastureland learned from this roller coaster of events? Steve says he’s had a couple of “aha” moments. One was when he realized that a national recession could affect a producer as small as Pastureland, with just four dairies in a tiny corner of Minnesota. Even though the strong local demand for its butter and cheese has never faltered, its need to do something with the rest of its milk exposes Pastureland to a much bigger market in which it is just another anonymous milk producer. The second lesson is that the price that farmers get for a staple like milk can be so volatile, even when the cost of making it doesn’t change at all. As Steve said, “it takes just as long to raise a cow as it always has, but the market gets to decide all of a sudden that the farmer gets paid less for it.” Capitalism makes the consumer king, and that’s not always to the benefit of the whole court.

Angelique Chao is a freelance writer in Minneapolis who spends her time noodling about the ethical implications of what we choose to eat. She thought she’d left philosophizing behind for good when she finished her dissertation and joined the business world, but after several years of corporate life her natural disposition reasserted itself; she’s now a full-time writer and researcher. When she’s not out touring farms and processing facilities, you’ll likely find her at one laptop-friendly spot or another -- a library, a coffee shop, or home. She blogs at From Animal to Meat. Her last post for Simple, Good and Tasty was Why Animal Lovers Should Eat Meat.