Since 2002, Vermont has lost half of its dairy farms.
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Ellen Kahler, executive director of the Vermont Sustainable Jobs Fund, right, questions Christophe Hille, left, and Ben Kerrick, consultants with Karen Karp & Partners, during discussion of a dairy industry marketing report before a joint meeting of the House and Senate agriculture committees at the Statehouse in Montpelier on Wednesday, February 26, 2020. Photo by Glenn Russell/VTDigger

But one dairy product may be the Vermont industry’s saving grace: premium cheese.

For the past year, the consulting firm Karen Karp and Partners has studied market challenges and opportunities for Vermont’s dairy farms. And the firm identified cheese as a hot new opportunity, largely because Americans are eating so much more of it.

“These cheese retailers, they love Vermont cheese,” KK&P consultant Ben Kerrick told lawmakers Wednesday. “They say the cheese from Vermont is the highest quality in the U.S.”

The new report was requested by lawmakers who are trying to find a way to spur market revitalization of Vermont’s dairy market.

At a joint hearing last week, the Senate Committee on Agriculture and the House Committee on Agriculture and Forestry heard about the impact of five years of low prices on Vermont’s dairy industry. Farmers are struggling to keep up with agency regulations and there’s a decline in academic research driving dairy market innovation, according to KK&P’s research.

While specialty cheese may be the answer for the state’s dairy farmers, Vermont isn’t leading in cheese sales, Kerrick said. He recommended that Vermont’s cheese producers reimagine their brands. The fact that a cheese is from Vermont isn’t enough to hook consumers into buying a premium product.

“Cheese brands that sell well in the New York and Boston markets, sell well because … they have interesting stories,” Kerrick said. “When someone comes into a high-end cheese retailer in Manhattan … they’re not looking for Vermont cheeses, they’re looking for the story of Jasper Hill. They’re looking for the story of Spring Brook. And those stories really resonate.”

Millenial and Gen Z buyers, who are taking up a larger portion of the United States’ consumer base, are also looking for food products that provide an experience.

“It’s often said that food is the new rock,” KK&P consultant Christophe Hille told lawmakers. He suggested that dairy farms could attract customers by providing tourism experiences on their farms.

Kerrick said consumers are more apt to buy more expensive dairy products that promote more natural ingredients.

Sen. Bobby Starr, D-Essex-Orleans, said it was “exciting” to hear that Vermont could expand the premium cheese market.

Starr supports a “price order” on certain dairy products. A price order is a fixed amount that dairy products can be bought and sold for, based on other market factors. The price would likely be fixed by a state commission, similar to Maine’s system, which Starr pointed to as a potential model for Vermont.

“So everybody can make some money,” Starr said, “but no one would get it all or get none.”

Rep. John O’Brien, D-Tunbridge, who sits on the House Agriculture Committee, said it’s unrealistic to think that many of the Vermont dairy farms the state has lost could be brought back.

“Everybody’s gotten so good at making milk,” O’Brien said, “When you hear about a 50,000 cow dairy starting in California, how do we compete with that?”

O’Brien, a sheep farmer, is more focused on preserving the small farms still left in the state. He’s thinking about introducing legislation that would make it easier for smaller Vermont dairy companies to compete with big-name brands in grocery stores. Placing local products at the same shelf level as Hershey dairy products could make a big difference, he said.

Chobani, the Greek yogurt marker, plans to become a publicly traded company in 2022. In preparation for an initial public offering (IPO), the company filed paperwork with the Securities and Exchange Commission (SEC).

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