Butter manufacturing and high-tech logistics comprise the other side of Organic Valley.

In a town of 300 souls, a plant closing can be devastating. In Chaseburg, Wis., where the creamery has operated for eight decades, it almost was, when the facility closed for 28 months in the late 1990s.

Then in May 1999, Organic Valley – based some 30 miles east – acquired the creamery, which has ridden the organic gravy train ever since. Lucky thing, too, considering the plant provides the bulk of the tax revenues for the tiny town, which includes perhaps three or four other businesses.

When Organic Valley reopened the Chaseburg Creamery, folks thought it might process about 12 million gallons of milk in a year, recalls Jeff Kragt, director of production and manufacturing. “They do that in a month now,” he says.

The plant – certified organic by Oregon Tilth – takes in about 10 truckloads of milk daily from member farms within the Organic Valley cooperative. The facility receives and pasteurized seven days a week, and churns for six, Kragt says. Milk arrives through two receiving bays; there’s also a bay for loading out pasteurized cream that’s sold to other customers including an organic ice cream maker.

Five cream processing tanks ranging from 1,500 to 2,500 gallons, plus a 10,000-gallon silo, feed to the batch churn (versus the continuous churns used in most modern butter plants). Each churning cycle uses about 7,000 pounds of cream to make a 3,500-pound batch of butter, and the plant churns on average about 14,000 pounds of butter per day, an output that varies by season, Kragt explains. Butter made in Chaseburg is sold under the Organic Valley brand as well as some private labels.

Two types of butter come out of the Chaseburg Creamery – the standard salted butter that most consumers are used to, and a European-style cultured unsalted butter that contains live and active cultures.

From the churn, finished butter is transferred to a trolley that takes it to the packaging line. There, the butter is pressed into paper-wrapped quarters that are packed into one-pound boxes.

The plant was founded in the 1920s as the Chaseburg Cooperative Creamery. It was sold in the 1980s and eventually wound up in the hands of Swiss Valley in 1997.

Since its acquisition by Organic Valley, the Chaseburg plant has undergone constant expansion and renovation. Among the changes have been new cream silos to accommodate the ever-increasing demand for product, a bulk cleaning-solution system, a truckers’ lounge and enclosing of the loading dock, which also brought a badly needed expansion of office space. In 2006, Organic Valley added a wastewater treatment facility to reduce the burden on municipal services and retain organic solids from rinse water. These solids are delivered to a local farm, which blends them in as part of a methane gas generator to produce electricity.

In 2004, Organic Valley established Organic Logistics LLC, a subsidiary that provides public warehousing and transportation for the organic and natural foods market. By teaming up with 81 independent milk haulers in 28 states, 12 freight carriers in 50 states and 20 distribution locations across the country, the company has handled an additional $4.3 million of freight. This has helped Organic Valley’s trade partners move their products at competitive rates and send out more full truckloads of goods in the face of high fuel prices.

Planning for the company’s Midwest distribution center began in 2003 and culminated in the July 2007 grand opening of its $17.5 million, 80,000-square-foot facility in Cashton, Wis., after 14 months of construction. Located on a 40-acre tract between the La Farge corporate headquarters and the Chaseburg Creamery, and convenient to interstate highways, the facility includes a 33,000-square-foot automated storage and retrieval system.

In addition to handling the co-op’s Midwestern fluid milk and national specialty products, the certified-organic facility in Cashton offers public warehousing services to this market segment. The center is set up to handle dairy products, meat, produce, eggs, butter, meat and packaging materials.

All products except fresh produce move through the center’s ASRS, explains Doug Muller, project and maintenance manager. Arriving products are checked for size and travel up and elevator into the computer-controlled system.

Two automated cranes move products around the racks that rise 11 levels high to about 80 feet above the floor; a third crane services the freezer. The cranes regenerate their own power as they are raised and lowered.

Full pallets leave the ASRS through two doors, one each for the cooler and freezer, then travel down a conveyor for load-out through one of 12 docking bays available for shipping and receiving. There are also pick tunnels to allow hand-picking of products for individual customers. “Not all our customers want a full pallet of product,” Muller notes.

Elsewhere at the facility, a manually sorted dry-storage area is kept at ambient temperatures for packaging material, some produce and dry powdered milk. A produce cooler is zoned to store fruits and vegetables at three different temperatures. The meat cooler is kept at 28 degrees F and features a side room equipped with a blast freezer than can provide temperatures down to -44 if needed.

Serving small customers as well as large within the diverse organic segment, the facility offers an at-grade dock to accommodate deliveries by vehicles smaller than a semi. “We’ve had a school bus pull up with product,” Muller says. “We get Amish buggies.”

Following the lead of the corporate headquarters building opened a few years ago, the Cashton distribution center is a “green” facility. It’s a high-rise building that requires a smaller overall land footprint and demands less manpower to service. A white PVC roof reflects heat, and the ASRS will operate unlighted except when hands-on servicing is needed. Waste heat from the refrigeration system is used to heat the ground below the freezer area to prevent winter frost heaves, Muller explains.

In addition, recycled materials – from structural steel to office furniture – were used whenever possible. “We did as much as we could,” Muller says.

Location: Chaseburg, Wis.
Year opened: Acquired in 1999 after 2-year closure; plant dates to 1920s.
Size: 13,000 square feet
Employees: 30
Products made: Organic cultured and uncultured butter (branded and private label).
Capacity: 14,000 pounds of butter per day; HTST up to 45,000 pounds per hour.

Location: Cashton, Wis.
Opened: July 2007 (ground broken May 2006)
Size: 80,000 square feet, including 33,000 ASRS (12,000 pallet spaces), 14,000 loading dock and 19,280 conventional warehousing (1,000 pallet spaces).
Employees: 85
Purpose: Organic Valley’s primary warehouse and distribution center, handling fluid milk products from the Midwest and national specialty products.
Special features: Constructed with fly ash in cement, recycled steel, recycled cotton insulation, white roof to reflect heat.