Small Dairy Pasteurizer Loan Program

The North Carolina Department of Agriculture & Consumer Services' Agribusiness Development Office is conducting a pilot project to loan small batch dairy pasteurizers to specialty farmstead dairy producers in the state. This project is designed to lower the capital costs of entry into value added dairy production, with particular focus on farmstead cheese. In addition, the project encourages farmstead dairy entrepreneurs to invest in sanitary production facilities to manufacture wholesome and safe products for the consumer. This project is being financed through a grant from the North Carolina Agricultural Advancement Consortium and USDA Valued-Added Block Grant Funds dedicated by the North Carolina Department of Agriculture and Consumer Services.

The pasteurizer loan program is conducted on a pilot basis, with the purpose of assisting farm-based entrepreneurs in entering the market and increasing profits. Participant farms will allow for NCDA&CS personnel to track production and sales to determine the business viability of small-scale value added dairy production in the state.

Only two pasteurizers are available for loan at this time, one 25-gallon pasteurizer and one 50-gallon pasteurizer. If the pilot proves successful, the project will seek additional resources to increase participation in 2005.

The goals for this project are as follows: 1) Site two small batch pasteurizers on farms for value-added commercial dairy production, and; 2) track the development of these value-added farmstead dairy operations for the duration of the pasteurizer loan. Tracking will include cash flow and production data that will be compiled into a report for use by service providers and other farms interested in value-added dairy production.

This project makes available two small batch pasteurizers to farmstead dairy producers for up to one year. There is no charge to participants for the lease, however a $1500 deposit is required.

Applicants will be selected using the following criteria:

  • Date of Request and availability of equipment
  • Business readiness of the applicant;
  • Experience in the dairy industry;
  • Viability of the business plan;
  • Knowledge of value-added dairy production;
  • Suitability of available pasteurizers to the planned production; 
  • Personal investment of time and money in the value-added venture

Successful applicants must demonstrate an ability to have available, at the time of receipt of the pasteurizer, all other necessary facilities and equipment for the safe and legal production of farmstead value added dairy products. Before taking possession of a pasteurizer, chosen applicants must have a facility established for manufacturing value-added dairy products, and that facility must pass state inspection by a designated representative of the NCDA&CS Food & Drug Division. For the duration of the loan period, participants must adhere to all state regulations and laws concerning production and marketing of value-added dairy products.

If, at any time during the lease of the pasteurizer, the participant ceases to use the pasteurizer on a regular production basis, or fails to adhere to laws and regulations pertaining to production and marketing of the product, the pasteurizer shall be returned to the possession of NCDA&CS, and will be made available to another qualified applicant.

Participants will be required to deposit $1,500 with the program as coverage against breakage of pasteurizer equipment owned by NCDA&CS. At the end of the loan period, deposit funds will be returned to the participant, less any costs for refurbishment or replacement of pasteurizer components.

Before taking possession of a pasteurizer, participants must sign a lease agreement with NCDA&CS stipulating the participant's sole responsibility for use of the pasteurizer in a safe and sanitary manner adhering to all pertinent state laws and regulations. NCDA&CS will not be held liable for any misuse of the equipment or any liability issues arising from sale of the value added product to the public.

Interested participants should submit a letter of introduction with the following information:

Mailing Address
Physical Address
Telephone Number (day and night)
Email Address (if applicable)
Number of livestock and type used for milking

In addition, the introductory letter should describe the type of value-added production planned; the applicant's background in dairy production and/or value added dairy production, the one-year goals of value added production, and a description of the targeted market for the product(s).

If program administrators determine that an applicant is a viable potential participant, NCDA&CS will contact the applicant for more information, including a business plan, a site visit to the place of production, and other steps as needed to determine the applicant's suitability for this program.

Potential participants may be identified and awarded a pasteurizer on a provisional basis, contingent upon several variables, including on-site inspection, fulfillment of regulatory requirements, purchase of product liability insurance, or proper knowledge of how to operate a pasteurizer. In the event that provisional awards are made, other applicants will be immediately notified.

Interested participants should mail their letters of introduction to the following address, or they may call or email for more information:

Mr. Ron Fish
Assistant Director for Marketing
NC Dept. of Agriculture & Consumer Services
Division of Marketing
1020 Mail Service Center
Raleigh NC 27699-1020

Tel: 919-707-3119