Tim Iwig, operator of Iwig Dairy Farm, milks a cow in the milking barn Monday afternoon. The company faced foreclosure, but is working on getting money by selling company shares to interested members of the community.
Tuesday, October 27, 2009
A local dairy farm fought to save itself from foreclosure last week by offering to sell $1,000 shares of the company to its customers.
The Iwig Family Dairy, located just outside Topeka in Tecumseh, sells milk exclusively in glass jugs. The milk is available only at Dillon’s, Hy-Vee and the Community Mercantile in Lawrence.
Iwig said that about 60 people offered to purchase shares in the company, far surpassing the $40,000 the business needed.
But the farm is not out of danger yet. The government’s Farm Service Agency is reluctant to renew its guarantee of the farm’s loans because it has historically failed to make a profit. Until the agency has approved this guarantee, Tim Iwig, the farm’s owner, cannot accept his customers’ offers to purchase shares.
“They’ve got a rule book they’ve got to adhere to,” he said. “But in an economic time like this, they maybe need to vary from their rule book a little bit, and help us get going here.”
The farm opened in 2004, and during the first four years of its existence, construction costs kept it from earning a profit, despite consistently rising sales. In 2008, the farm had its first profitable quarter.
But then the economic recession hit, and when gas prices rose, people conserved their money by cutting down on premium-quality milk. Iwig Family Dairy’s milk is more expensive than national brands because of the farm’s small size and the glass containers, which the Iwigs said made the milk taste better.
“We had high-priced grain in ‘08, record-high feed prices, record-high fuel, along with decreased sales volume. And when I thought that we might be getting ready to pull out of it, the milk price crashed,” he said.
Iwig Family Dairy lost a third of its business that year.
Alison King, Lawrence senior, said she bought a jug of Iwig milk recently because she heard the farm was having trouble, and because she enjoys the taste. She said she didn’t regularly purchase Iwig milk, but has many friends who do.
“It’s the difference between conventionally produced milk on a large dairy farm and a smaller operation,” she said. “Theirs is a lot sweeter.”
To win the Farm Service Agency’s guarantee, Iwig has been working with a consultant to increase the farm’s profitability. He plans to start selling milk in plastic as well as glass jugs. Milk in plastic jugs will cost less because the packaging is less expensive. He also plans to open the farm to tours by local schools and change a corn patch on the property into a corn maze.
David Nolle, assistant director of the Topeka Boy Scouts of America, was one of the customers who offered to buy a share of the farm. He said he had purchased milk for his family from the Iwig Family Dairy since the farm opened.
“Supporting a local dairy, supporting a local producer of any sort that’s growing something natural, is just the right thing to do,” he said. “I think it’d be a loss to our community if we didn’t have the Iwigs there.”
Despite its continued financial troubles, Iwig said he thought the farm would survive in the long run.
“As far as I can see, there’s a path, and there’s a light at the end of the path,” he said.
— Edited by Sarah Kelly
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