Customers’ changing demands from food producers are driving the importance of strong working relationships between dairy farmers and milk processors.
Participants in a panel discussion today at the Dairy Business Association's Dairy Strong conference used words like trust and transparency to describe the essential elements. They build a shared understanding that farmers and processors have the same ultimate goal — to please the customer.
“There’s a mutual reliance on each other,” said Jason Mischel, vice president of sales and procurement at Valley Queen Cheese in Milbank, S.D.
Mischel and the company’s CEO regularly visit their supplying farms to build personal connections and keep the lines of communication open.
“These visits provide good opportunities to have honest, frank discussions with our partners,” he said.
Kevin Souza, owner of Victory Farms, is one of those partners.
“We are in a small community and are in contact all the time,” Souza said. “It’s nice to know we have a good company to work with and a good place to ship our milk.”
Sharing a common language, a desire to succeed and a commitment to community helps foster stronger ties. In some small towns, farmers and processors have had longtime business relationships, as is the case with Jim Winn, owner of Cottonwood Dairy in South Wayne, Wis., and Greg Siegenthaler, vice president of Grande Cheese Company near Fond du Lac, Wis.
“It means a lot to be in business with guys we’ve known and trusted for a long time,” Winn said. “It’s important to get to know the people in your partnerships. The professionals at Grande have become friends; they’ve been looking after us.”
"With the right attitude, anything is possible," Siegenthaler said. "Traits necessary to find in our producers include vision, motivation and decisiveness in business."Siegenthaler looks at these relationships within Grande’s four pillars of corporate responsibility: business sustainability, environmental awareness, associates, and community need and outreach. These pillars can only be truly understood and managed if processors and farmers have the same vision and goals, he said.
There are times when difficult conversations are necessary because customers want changes, like in animal welfare or environmental sustainability. The panelists talked about the phasing out of rBST, a growth hormone, as an example. Mischel said he didn't look forward to telling his farmers what they could and couldn't do, or taking away a responsible and financially beneficial management tool. So, Valley Queen provided flexibility, which Souza appreciated.
“At first we were reluctant to get rid of rBST, but Valley Queen gave us a year to consider our options,” Souza said. “That meant a lot to us, and our communication has improved over time.”
Siegenthaler and Mischel said that a willingness to adapt, as customers’ decision-making evolves, is an important trait in their farmer members.
“Digging in your heels in this type of consumer environment just isn’t going to make you successful,” Mischel said.
Keeping an open mind is also helpful in cultivating innovative ideas for both the farmers and processors. Mischel routinely hosts his customers at Souza’s farm, giving cheese buyers and chocolatiers the opportunity to see where the dairy products they use originate and to provide feedback on what they see.
There’s a lot at stake, for everyone, in building strong relationships, Mischel said.
“This will keep us relevant, competent and successful well into the future.”