The University of Tennessee Center for Profitable Agriculture and department of animal science are combining expertise with experts from Kentucky and North Carolina to enhance the success of regional dairy businesses.

The team, led by University of Tennessee extension dairy specialist Liz Eckelkamp and Hal Pepper, a certified public accountant financial specialist, has been awarded a $6 million grant from the U.S. Department of Agriculture's Agricultural Marketing Service as part of the agency’s "Diversifying Income & Adding Value by Manufacturing Dairy Products-Phase 2" efforts.

Eckelkamp and Pepper were selected in October 2019 to lead the USDA-sponsored Tennessee Dairy Innovation effort to help Tennessee producers develop innovative dairy products, and this award is an extension of that work.

The new project will provide educational opportunities to help participants manage financial risk by evaluating opportunities to develop and market value-added products. Producers wanting to start or expand a dairy business in Tennessee, Kentucky or North Carolina are the intended audience for services that include enterprise assessments, direct marketing workshops, business feasibility studies and more, the announcement said.

“The region’s dairy industry has really struggled in recent years, and the pandemic has led more consumers to look to local producers for food and dairy products. These producers want to better understand their costs so they will know whether developing creative products and fresh marketing ideas will improve their viability,” Pepper said.

Eckelkamp added, “The goal of this project is to help our dairy farmers understand the costs and potential benefits of starting a farmstead creamery. Through this subaward grant, we can also help relieve some of the financial burden that goes along with starting a new business.”

The three-year effort is expected to help regional producers evaluate their potential for value-added enterprises through these measured efforts:

• A benchmarking project to collect data from 60 southeastern dairy farms to establish average costs and efficiency measures and workshops to teach producers how to interpret and use the benchmark measures;

• Value-added enterprise assessments that will describe the current state of value-added dairy processors and serve as a baseline for future farm support efforts;

• Providing an annual value-added dairy conference for the duration of the project, and

• Conducting a survey of southeastern U.S. farmstead creameries.

Eckelkamp and Pepper will partner with Tim Woods and Jerry Pierce of the University of Kentucky, H.H. Barlow with the Kentucky Development Council and Stephanie Ward with North Carolina State University, as well as other dairy industry supporters.

Rob Holland, director of the University of Tennessee Center for Profitable Agriculture and interim assistant dean of University of Tennessee Extension, said, the university "is well suited to lead this effort. For several years, the Center for Profitable Agriculture has been working with Tennessee and regional producers to establish value-added businesses and products as a means to enhance farm income. Applying that expertise to the dairy industry is a win-win for everyone.”