Petaluma dairy, poultry producers weather uncertainty

Last year’s Butter and Egg Days festival celebrated Clover Sonoma, Petaluma’s most prominent dairy company. It featured Clo the Cow, the company’s mascot, riding high on a float in the event’s centerpiece parade through downtown Petaluma.

This year, Clo, like the rest of the country, is at home.

“At this time last year, Clo was the grand marshal,” said Marcus Benedetti, Clover Sonoma CEO. “Now, she’s quarantined.”

Saturday would have marked the 39th Butter and Egg Days Parade, a salute to the dairy and poultry industry that defined Petaluma’s early development. Like most events this spring, the festival was upended by the coronavirus outbreak. Organizers now hope to reschedule it later this summer.

The loss of the signature promotional event is just one of many hardships that local dairy producers face as the pandemic has severed supply chains, reduced the price of milk and cut into demand in the food service sector. In some parts of the country, dairy farmers are reportedly dumping milk even as some grocery store dairy aisles are bare.

For Clover Sonoma, the outbreak has caused the company to adjust its distribution channels, and farmers who sell to Clover have so far weathered the chaos in the market.

Small dairy producers, though, are struggling. The pandemic has already forced Petaluma-based Three Twins Ice Cream to close.

Meanwhile, egg farmers are scrambling to keep up with demand.

“We’re an essential business and we’re trying to keep milk on the shelves for everyone,” said Jim Riebli, a west Petaluma dairyman who sells milk to Clover. “Everything is OK for us at this point.”

The four employees at Riebli’s Rainsville Road ranch have been working with masks and gloves and isolating as much as possible, he said.

The lockdown for the past month has virtually halted Clover’s food service distribution, which accounts for 30% of its business, Benedetti said. Clover sells its products directly to Bay Area restaurants, hotels and coffee shops, all of which are closed or open for take-out only.

Additionally, Clover sells to businesses like Google, Apple and Tesla for their employee cafeterias, and distributes to the University of California system. With work and school all moving to home, that side of the industry is on hold, Benedetti said.

“People have shifted where they eat,” he said. “In some cases, they are drinking more milk at home. They’re not eating less, they are just eating differently.”

The increase in demand at grocery stores as made up for the loss of food service distribution, Benedetti said. And with more people home baking, butter and eggs are flying off of store shelves, he said.

“Grocery stores are the only game in town right now where most Americans are getting their food,” he said.

Clover has not had to layoff any of its 270 employees, Benedetti said, although the outbreak has forced a change in the way the company works. Employees now wear personal protective gear, and those who can work from home.

Throughout the pandemic, Benedetti said Clover is having local restaurants cater three meals a day for workers, providing a morale boost to employees and a financial boost to struggling Petaluma restaurants.

For dairy farmers without a channel to the retail market, the outlook is much more uncertain. Double 8 Dairy in Valley Ford produces 200 gallons of milk a day, which it sold exclusively to high-end restaurants and coffee shops that are no longer buying it. As a result, owner Andrew Zlot is giving most of its supply to Bay Area food banks.

“We could just dump it - it would be cheaper,” Zlot said. “But that would be a total waste. Food banks are dying for milk.”

Double 8 Dairy has set up a GoFundMe page that has so far raised nearly $10,000 to continue donating milk to food banks. The dairy is able to sell its niche buffalo milk to a producer in the Central Valley, and it makes mozzarella cheese for pizza restaurants that are still open for take-out.

Still, Zlot said he had to lay off four of his 12 workers and has applied for a loan from the federal stimulus package.

“We’re figuring out how to tread water until the economy opens up again,” he said. “This crisis is hitting the little guy hard.”

The U.S. Department of agriculture last week announced a $16 billion package of direct assistance to farmers and ranchers who have suffered economic losses related to the pandemic and another $3 billion in purchases of food for distribution to food banks and other nonprofits.

Tawny Tesconi, executive director of the Sonoma County Farm Bureau, said local dairy farmers aren’t seeing the same kind of supply chain issues that have caused farmers elsewhere to dump their product.

“The fortune thing is we have smaller organic dairies and processors, and we have all parts of the food supply chain covered. That helps tremendously,” she said. “Our creameries are nimble and can pivot to a change in demand. And we have a strong brand. People care that their milk comes out of Sonoma County.”

Petaluma-based Straus Family Creamery has for a long time carved out a niche, becoming the first dairy west of the Mississippi River to go all organic. Founder and CEO Albert Straus said this has insulated the company from some of the pressures others in the dairy industry face.

“Things are doing well despite the crisis,” he said, noting that the company has hired workers laid off from other industries. “Food is still essential.”

Straus said the company has temporarily reduced production from the 12 farms from which it buys milk in order to keep up with a change in demand. An innovator in the industry, Straus said the pandemic is an opportunity for dairy companies to rethink their supply chains.

“What we’re seeing across the country, dumping milk, it shows that infrastructure is needing to be improved,” he said. “The way we get food to market is not prepared for this kind of crisis. We’re seeing farmers markets booming. Home delivery is doing well. This is an opportunity to create a more localized food system.”

While dairies adapt to changing conditions, Petaluma egg farmers have never been busier, according to Jordan Mahrt, whose family owns Petaluma Egg Farm. Eggs, along with toilet paper and cleaning supplies, have been hot commodities during the outbreak.

“As soon as this hit, people wiped out store shelves of eggs,” Mahrt said. “Demand has been crazy. Some stores are limiting how many eggs you can buy.”

Mahrt said the company’s biggest expense has been for masks and gloves for employees and for overtime to keep up with the increased demand.

The deep-rooted Mahrt family this time of year would normally be preparing a float for the Cutest Little Chick Contest, one of the many beloved Butter and Egg Days traditions that will be missed this year.

“It’s a bummer for us,” Mahrt said. “We can’t wait for it to go on next year. It’ll be bigger and better.”

(Contact Matt Brown at matt.brown@arguscourier.com.)