Firth’s Prairieland Dairy emphasizes sustainability and locality

By Ross Benes, NewsNetNebraska

Sometimes a dairy can produce much more than milk.

Instead of expanding its cattle herd or entering new markets, Prairieland Dairy plans to branch out in novel ways, including some that promote sustainability.

“We can grow our business from composting, direct marketing and ag tourism,” Prairieland General Manager Dan Rice said. “We grow our business around the cow, but not necessarily by increasing our cow numbers.”

A screen separates materials being made into compost.

A screener separates materials being made into compost.

Five years after building its  facilities near Firth, the company merged with two other farms and has continued to grow ever since, increasing its revenue from $3 million in 2000 to $15 million in 2011.

Cattle are raised to produce three things – milk, meat and manure. Prairieland now has separate divisions to market each of these products – Prairieland Dairy, Prairieland Foods and Prairieland Gold.

Prairieland Gold began in 2004 when the farm began accumulating extra manure it couldn’t use in its fields.  Prairieland Foods began in 2009 when a local processing plant went for sale.  Rice believes Prairieland Gold has the best growth potential because he’s seen great interest in sustainability and recycling food waste.

The company works with school cafeterias and large companies such as ConAgra to dispose of its food waste in an environmentally friendly way.  Prairieland turns the food waste into compost – a product it sells as fertilizer and soil.

Compost varies in quality and price.  When made from only manure, it is labeled organic and can sell for more than $200 per yard.  Compost with mixed manure and food waste is cheaper, however.

Turning waste into profit isn’t unique to Prairieland, according to University of Nebraska-Lincoln agricultural economist Gary Lynne. As chronicled in the book “Green to Gold” by Daniel Esty and Andrew Winston, some CEOs envision future business models built on converting waste into new products.

“It’s kind of like using everything on the buffalo,” Lynne said.

Video: Prairieland Dairy prides itself on being environmentally friendly

By emphasizing locality and environmentalism, Prairieland is an example of a small farm staying competitive by offering a specialty.  Since 1935, the number of farms in the United States has decreased from 6.8 million to the current 2.1 million, according to the U.S. Environmental Protection Agency. The remaining small farms have managed to be competitive by bringing in outside income or filling a niche market, Lynne said.  Niche markets include local, organic and exotic foods.

Being a local company that prioritizes protecting the environment gives Prairieland a good story to tell its customers, Rice said. That local connection allows them to engage customers in ways impossible otherwise.

Instead of selling all its milk on the Chicago Board of Trade as a commodity, Prairieland directly markets 40 percent of its milk to Lincoln customers.  This gives the $15 million company an opportunity to expand without increasing its inventory.

By using direct marketing, Prairieland can cut distribution costs, which Rice believes is the biggest problem facing the local food movement. Since local companies often produce and ship fewer goods than larger national companies, local companies face a higher per item shipping cost.

A sign attached to a mailbox greets visitors of Prairieland.

To combat distribution costs, Prairieland sells its milk todirectly local grocery stores. Customers also can buy Prairieland milk right from the farm’s shop in Firth. Though Prairieland milk is now sold in Omaha and Kansas City, Rice wants to focus the company’s future solely on the Lincoln area to further reduce distribution costs.

“Our goal is to be Lincoln’s hometown dairy,” he said. “By staying close to Lincoln, we can also reduce our carbon footprint.”

Another area Prairieland has ventured into is ag tourism. This past year, 15,000 people toured the farm. The company has seen an increased interest in tourism despite the fact it has never advertised.

Both direct marketing and ag tourism evolved after the company realized how interested people were in seeing where their food comes from and buying local, Rice said.

“If someone wants to expand that part of our business and run with it, we think it could be huge in the future,” Rice said.

By reducing distribution costs, maintaining its herd number and diversifying, Prairieland is able to grow its business while reducing its environmental impact. In an economy where environmentalism has become an issue — and even Walmart has a sustainability index — the green practices of Prairieland could pay off tremendously.

But it’s not all about business to Rice.

“We aren’t environmentally friendly just to make money,” he said. “We do it because it’s the right thing to do.”