Larry Peter honored for contribution to local dairy industry

It was in 2004 when Petaluma Creamery, a fixture of Petaluma’s dairy industry since 1913, went up for sale. Located on prime real estate at the eastern edge of the city’s historic downtown, the aging facility seemed destined to disappear in favor of new commercial or residential development.

The news hit close to the heart of Larry Peter. A Sebastopol native, Peter spent his childhood enchanted by farming and finally entered the industry himself with his 1987 purchase of a dairy ranch in Two Rock. As a small-scale producer of organic cheese sold at regional farmers’ markets, the thought of losing an iconic business from his beloved industry did not sit well.

So he bought it.

“I’ll never forget that day,” he said. “It was my mom’s birthday, May 21. I read in the Press Democrat, ‘Creamery shuts down after 91 years.’ That’s why I put in a bid, to save the history of the place.”

Honored for Excellence in Agriculture at the 2015 Petaluma Area Chamber of Commerce’s Community Awards of Excellence, Peter has established himself as a central player and advocate in the world of North Bay dairy ranching. His creamery on Western Avenue supports a local market for the region’s diary farmers while seizing consumer demand for locally produced artisanal foods.

“It helps keep dairy in our region, because it gives our farmers an outlet for their product,” said Tim Tesconi, executive director of the Sonoma County Farm Bureau. “I think there would be fewer dairies here without Larry.”

Opened at a time when many farmers would deliver their milk by horse and wagon, Petaluma Creamery was once among the top five butter producers in the world, Peter said. Yet that history did not insulate the facility from turmoil in diary markets, prompting Dairy Farmers of America, its owner since 1998, to pursue a sale.

While Peter’s own dairy business, Spring Hill Cheese, was thriving, buying the larger-scale Petaluma Creamery was not simply a matter of writing a check. Peter offered his Two Rock ranch to help secure financing to purchase and operate the facility, essentially putting one dream on the line in hopes of something more.

“I used everything. The bank had my underwear,” he said, laughing.

Those early years represented some major challenges, with supply chain issues that spurred a temporary shutdown in 2005. Peter used that period to raise additional capital by selling his own Spring Hill Cheese in farmers’ markets throughout California, all while forging renewed relationships with North Bay dairy suppliers.

“How I was able to survive was, I was doing 120 farmers markets a week,” he said. “I was able to generate enough cash to get going again.”

An agreement to refinance $10 million in startup costs with Bank of the West in 2007 helped Peter to restart the creamery as an operation focused primarily on local suppliers. His approach attracted a significant supply contract with restaurant chain Chipotle Mexican Grill in 2010, the first of several larger agreements to supply bulk dairy products for producers that emphasize a “local” supply chain, he said.

Now over 100 years old, Petaluma Creamery today employs more than 100 people and sells up to 500,000 pounds of cheese and 300,000 pounds of milk powder a week, he said. The company also produces ice cream, whey powder, sour cream and butter under the certified organic Spring Hill Cheese and Petaluma Creamery brands, as well as third-party-branded dairy products. While Peter didn’t grow up on a farm, agriculture became a part of his life at an early age. His mother helped found the Santa Rosa Farmers’ Market, and sold heirloom potatoes for 30 years. His father worked in lumber following service in the Korean War, and long held his own dreams of raising his family on a dairy farm.

Today, Peter, who described a declining number of young people in farming, tries to teach that love to the next generation. His ranch has hosted “The Great Peter Pumpkin Patch” for 20 years, with more than 6,000 children participating in farm-themed entertainment every year. He is also a strong supporter of 4H, Future Farmers of America, the Sonoma County Farm Bureau and other groups supporting agriculture business and education.

“If you don’t have farmers, you don’t have food,” he said. “It’s not about making money with the creamery. It’s about keeping agriculture alive.”

(Contact Eric Gneckow at eric.gneckow@arguscourier.com.)