State

Foster dips up smaller scoop

Humboldt Creamery is something of a throwback, a dairy processor supplied by fairly small herds of cows munching on pasture grass.

Its prospective future owner, Foster Farms Dairy of Modesto, is a leader in large-scale milk production from cows that get a mix of rations.

Despite the contrast, Foster Farms is the right company to be taking over, said Len Mayer, the creamery's acting chief executive officer.

"I think people understood pretty quickly that a dairy company that's been in the industry, that knows the margins and the pitfalls, would make sense," Mayer said Friday from the creamery's office in Eureka.

Foster Farms was the sole bidder this week for the 80-year-old creamery, which filed for bankruptcy protection earlier this year. The $19.25 million price, down from the $20.5 million discussed earlier, got conditional approval Thursday in U.S. Bankruptcy Court.

The purchase is expected to close Aug. 26, assuming it gets approval from creditors and bankers.

Foster Farms executives said they plan to market the Humboldt products in Northern California, the Pacific Northwest and Mexico. The products include an organic line.

"The Humboldt Creamery assets are a great complement to our existing business," said Jeff Foster, CEO and president of Foster Farms, in a news release. "We look forward to building an integrated business that carries forward our longstanding tradition of quality products and excellent serv-ice."

Foster Farms will continue the Humboldt Creamery brand as well as its own Crystal brand, which it adopted last year after another acquisition.

Humboldt Creamery fluid milk is sold mostly in Humboldt and Del Norte counties. The less perishable products, including ice cream and powdered milk, are shipped farther, including strong ice cream markets in Washington and Oregon, Mayer said.

The likely continuation of the operation is welcome to dairy farmers, who have been concerned about a shortage of processing capacity in California.

"The most immediate positive is for the producers there and the community," said Michael Marsh, CEO of Western United Dairymen, based in Modesto.

As for Foster Farms, he said, "They're a very good company, well-run, and they've been here forever."

Humboldt County's fog-kissed dairy lands are far removed from the San Joaquin Valley, the heart of the state's milk production.

The North Coast county produced 28.2 million gallons of milk last year, compared with 471.6 million in Stanislaus County, according to the California Department of Food and Agriculture.

Humboldt County's average farm had 218 cows last year; Stanislaus County farms averaged 674.

The creamery has found its niche by stressing the pasture-based feed for the cows. Some of it is certified organic, meaning higher retail prices for the products.

Foster Farms, like the rest of the conventional dairy industry, sees pasture as part of a diet that also can include corn, alfalfa and other feed in confined spaces.

Mayer said that despite the differences in size and approach, the marriage makes sense.

"I think there are a lot of parallels between the two businesses — closely held businesses that specialize in dairy and have been around for a long time," he said.

Bee staff writer John Holland can be reached at jholland@modbee.com or 578-2385.

    

AT A GLANCE

HUMBOLDT CREAMERY

  • Founded: 1929
  • Location: Headquarters and processing plant in Humboldt County; dairy farms in Humbolt and Del Norte counties; frozen product distribution center in Stockton
  • Employees: About 150
  • Volume: About 670,000 gallons of raw milk per week
  • Products: Fluid milk, ice cream, powdered milk, butter, cheese, yogurt, sour cream, orange juice and others
  • Ownership: 75 percent by a cooperative of about 40 North Coast dairy farmers; 25 percent by Dairy Farmers of America, a national cooperative
  • On the Net: www.humboldtcreamery.com

FOSTER FARMS DAIRY

  • Founded: 1941, two years after the separate poultry company under the same name
  • Location: Headquarters and processing plant in Modesto; processing plant in Fresno; several dairy farms in the
  • San Joaquin Valley
  • Employees: About 950
  • Volume: About 3 million gallons a week
  • Products: Milk, ice cream, butter, sour cream, cottage cheese, powdered milk, yogurt, fruit juice and others
  • Owners: Foster family
  • On the Net: www.fosterfarmsdairy.com
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