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Cheese Maker, Beef Operation Thrive on New Gloucester Farm

December 07, 2009 - NEW GLOUCESTER -- On a sunny late-autumn day, Pineland Farms is a model of agricultural perfection.

The dairy barns smell of straw and sawdust instead of manure. The fields are mowed to golf course-like smoothness. Miles of white fence surround rolling hills dotted with grazing beef cattle. The only thing missing from this picture-book illustration is a strategically placed rainbow.

But behind the pastoral facade is a thriving business. Ten years after the Libra Foundation bought the abandoned residential campus for developmentally disabled adults and turned it into a 5,000-acre agriculture and education complex, its farming investments are starting to pay off.

The farm's beef cattle operation and its cheese-making business are poised to turn a profit this year, the foundation says. Demand for locally produced food is contributing to the farm's success, along with economies of scale, luck and good timing.

The two businesses – Pineland Farms Cheese and Pineland Farms Natural Meats Inc. – are both putting Maine on the map as a major producer of natural food products.

"I have my hands full," said Owen Wells, foundation president.

The foundation, created by the late microchip millionaire Elizabeth B. Noyce, started to focus on sustainable agriculture after helping to reinvigorate downtown Portland.

The meat business was born in 2005 when the foundation bought Wolfe's Neck Natural Beef, operated by the Wolfe's Neck Foundation in Freeport. Wolfe's Neck Natural Beef had its roots on the 626-acre Wolfe's Neck saltwater farm, where conservationists Eleanor Houston and Lawrence Smith established a herd of 50 black Angus cattle in the 1950s and created a market for natural beef.

By 2004, the business was selling 140,000 pounds of pesticide- and hormone-free meat to grocery stores around New England. But it wasn't making any money.

The foundation holds a 20 percent stake in Pineland Farms Natural Meats, a for-profit venture. The rest of Pineland Farms is owned by William Haggett, former CEO of Bath Iron Works, who serves as chairman of the board and CEO; Erick Jensen, former farm manager at Wolfe's Neck Farm, who built up the meat business; Michael Harder, former CEO of Jordan Meats; and David Packem.

The company's annual sales this year are above $20 million, and based on agreements with its purchasers, Haggett expects sales to hit $40 million by the end of next year.

Haggett said the business faced several hurdles as it tried to carve a niche for regionally sourced beef. First, it was competing against established beef producers and big cattle-raising states, where the infrastructure of slaughter and packing houses was already in place.

"And the economics of raising cattle are very much driven by economies of scale," said Haggett.

At the same time, the company had to remain true to its original mission: producing high-quality prime and choice naturally raised beef, supporting small family farms and raising the cattle humanely.

Pineland Farms beef, which is considered natural, comes from cattle that are raised on a vegetarian diet without growth hormones or antibiotics and are fattened up for six months in feedlots. Organic beef comes from cattle that are fed an organic diet with unrestricted access to the outdoors.

The farm has been experimenting with allowing the cattle unrestricted outdoor access to meet the demand for meat raised without feedlots – which can foster deadly E. coli contamination. It is not yet clear whether unrestricted access would be profitable.

Maine does have some pluses when it comes to beef farming, which may explain why it is New England's largest beef producer. The state's damp, cool climate is perfect for growing the grass that is the primary diet of Pineland Farm cattle.

Land is relatively inexpensive, and the state's potato farmers are eager to supply the 300,000 bushels of barley, grown as a rotation crop, which are needed annually to fatten up Pineland cattle.

Pineland Farm Meats replaced its small Wolfe's Neck Farm feedlot with a massive operation in Fort Fairfield, halfway between Presque Isle and Caribou in northeastern Aroostook County.

The feedlot, the largest in the Northeast, now produces about 30 percent of the beef sold by Pineland Farms. The Maine-raised beef is sold at Hannaford Supermarkets as Nature's Place Beef, at Whole Foods under its own label and at other New England retail outlets as Wolfe's Neck.

The cattle, mostly red and black Angus, are born and raised on small farms. Maine farmers produce about 1,000 calves for the operation according to Pineland Farms specifications.

Pineland Farms buys the calves when they are several months old and contracts with farmers to graze them in pastures from April to September. They are then trucked to Fort Fairfield, where they are fattened up to about 1,300 pounds in about six months. All of Pineland's meat is slaughtered and packaged in Pennsylvania.

The feedlot has been slowly expanding, and this summer, it will be able to accommodate 2,400 cattle in pens and another 500 cattle in pastures. Haggett said the feedlot could handle up to 10,000 cattle a year. The company has opened similar operations in the Mid-Atlantic and is venturing into the Midwest.

Luck and good timing have helped the Pineland Cheese operation reach the brink of profitability 18 months after its first product hit the shelves.

The cheese business was the brainchild of Wells, who wanted to find another use for the milk produced by the famous Wilsondale herd. The foundation bought the herd from owner Mike Wilson, who still oversees the cows with the help of his son-in-law, Norman Martin. The milk from the herd is sold to the Agri-Mark cooperative, which supplies the milk for the cheese-making business.

Jere Michelson, the foundation's chief financial officer, was tasked with starting the business from scratch with a $5 million investment. He found cheese maker Mark Whitney in Vermont, where he was managing a small cheese-making shop.

The cheeses, which include cheddars, baby swiss, Monterey jack and feta, are made and packaged in a 13,000-square-foot state-of-the-art creamery on the farm and aged in a facility in Gardiner.

Michelson credits much of the success to the quality of the cheese. Early on, Whitney sent it off to the American Cheese Society competition with the aim of getting some useful feedback from judges. Instead, the onion and garlic Monterey jack cheese snagged first prize, and the salsa jack took third. The feta won first place in this year's competition.

That created a lot of interest in the product, said Michelson, and it was picked up by Hannaford and Whole Foods outlets. More equipment was added to the creamery in order to meet all the orders.

Today, the venture, the largest cheese company in the state, employs a two-person sales staff and 28 others who are churning out 600,000 pounds of cheese annually. Sales hit the $1.5 million mark this year, and the goal is to reach $6 million within the next five years.

The business has broken even for the past four months, and if all goes according to plan, it will soon show a profit, said Michelson.

The profits will be plowed back into the Pineland Farms complex. Meanwhile, Michelson said he and Whitney are already thinking ahead. He said Oakhurst Dairy in Portland has expressed interest in a cottage cheese venture. He is also considering butter.

"That is why we named this place a creamery," he said.

By BETH QUIMBY, Staff Writer December 6, 2009


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