As one of the largest and most successful dairy cooperatives operating in the Midwest and South, Prairie Farms relies on the freshest dairy milk from more than 600 multigenerational, independent family farms to manufacture hundreds of dairy products. Class I products include farm-fresh white and flavored milk, buttermilk, and egg nog. Class II offerings include cottage cheese, ice cream mixes, sour cream and dips, yogurt, whipping cream, half & half, premium ice cream, novelties and sherbet. Class III includes a wide variety of cheese, like Swiss, Blue, Gorgonzola, Gouda, Cheddar curds, Neufchatel, and cream cheese.

One of the first things Matt McClelland, CEO and executive vice president of Prairie Farms Dairy, proudly tells Dairy Foods during a visit to its Edwardsville, Ill.-based headquarters is, “I work for a bunch of dairy farmers. They’re the heartbeat of this company, and without them, we wouldn’t exist.”

Prairie Farms farm-to-table values, its support of hardworking local farmers and 7,000 team members who work in 47 manufacturing plants throughout America’s heartland all have one important thing in common: a passion for feeding American families with the freshest, most nutritious, and delicious dairy products.

Founded in 1938 and now entering its 86th year, Prairie Farms packaging testifies to the dairy’s endearing story with a gold flagged “Farmer Owned,” a pivotal part of the brand’s distinctive red-and-white logo. Packaging, complete with a black-and-white Holstein cow, also states: “Dedicated Farmers, Happy Cows, Real Milk.”

McClelland notes that “there’s a lot of room for growth” on the cultured dairy side, which comprises nearly 3% of its total business.

Prairie Farms branded products are primarily distributed to Alabama, Arkansas, Illinois, Indiana, Iowa, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, North Dakota, Ohio, South Dakota, Tennessee, and Wisconsin. Additionally, its new single-serve iced coffee is being distributed to markets in Texas.

“I am biased, and I try to stay humble, but especially in our cultured products, I believe we’re best in class,” McClelland says. “We’ve been fortunate with the awards our cottage cheese has enjoyed the last couple of years. First off, it comes with the quality of milk coming from our farms. I always tell people I can add chocolate to it, I can add sugar to it, I can sweeten it up — there’s a lot of things we can do to it once it gets to us — but I can’t make the quality of milk better than what I get from the farm. Again, it’s really a cornerstone, quality milk from the farm."

In addition to its popular milk, ice cream and cottage cheese, the co-op also manufactures 100% pure orange juice, fruit-flavored drinks, and sweetened iced tea. And in recognition of the vast potential of the ready-to-drink (RTD) beverage category, in February, Prairie Farms launched its first — but not the last — new product of 2024: single-serve iced coffee in Mocha and Caramel flavors.

McClelland explains that the release of the RTD barista style iced coffee in 14-ounce bottles was inspired by the success of the company’s iced coffee, made with 100% real milk, which has been sold in half-gallon cartons since 2013.

“Our award-winning, single-serve milk lineup has consistently positioned Prairie Farms as the market leader for many years. Now, our half-gallon iced coffee has paved a successful path for new single-serve iced coffee options, allowing us to serve more on-the-go coffee lovers than ever before,” he says. “he says. “Our farm families work hard to produce high quality milk, and we’re always looking to support their efforts with new value-added products.” 

McClelland notes that dairy-based products comprise 90% of Prairie Farm’s $4.6 billion business, which stood at No. 16 on Dairy Foods’ Top 100 list with 2022 net sales of more than $4.2 billion. He points out that throughout the dairy’s 86-year history, the company’s expansion has consistently been very strategic, with more than 50 acquisitions, more than a dozen mergers, and several joint ventures contributing to its bottom line and ability to diversify its portfolio.

For example, when Prairie Farms merged with Davenport, Iowa-based Swiss Valley Farms in the spring of 2017, they were able to significantly boost their ability to manufacture hard cheese. The combined company operates under the name of Prairie Farms Dairy, McClelland says.

“To me, the distinction between our hard cheese and our soft cheese is important because one of the most interesting parts about our relationship with our cheese division is for dairy folks, we’re used to seeing milk go off the farm, into our processing facility, and out the door to our customers within 48 hours. Cheese is a totally different world," he relays.

“We’re still learning as we go through that process. It’s indescribable how much the management team from the cheese division has meant to our organization,” he adds. “They are the experts when it comes to hard cheese. We were very fortunate to have the management team come aboard during that merger, a great team, an award-winning team.”

An eye on plant production

Yet, it was more than 40 years ago when Prairie Farms Dairy, in a move orchestrated by then CEO Fletcher A. Gourley, who served the co-op in that capacity from 1938-1988, really began seeing explosive growth. In 1979, Prairie Farms Dairy entered a joint venture partnership with Springfield, Mo.-based Hiland Dairy Foods. The co-op maintains an 80% stake in the dairy, while the Kansas City, Kan.-based Dairy Farmers of America (DFA) cooperative has a 20% stake.

Prairie Farms is 100% responsible for the management of Hiland Dairy Foods, which operates processing plants in Arkansas, Kansas, Missouri, Nebraska, Oklahoma, Tennessee, and Texas. The brand is also well-recognized through distribution in seven states: Arkansas, Kansas, Missouri, Nebraska, Oklahoma, Iowa, and Texas.

To churn out thousands of gallons of milk, cheese, ice cream, and more, Prairie Farms Dairy operates plants in Illinois, Indiana, Iowa, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Ohio, South Dakota, and Wisconsin. (For more on Prairie Farms’ operations, see Inside the Plant in this issue).

Prairie Farms Dairy has a distribution footprint of more than 40% in the United States, and its dairy products are widely available in grocery chains, mass merchandiser stores, club stores, convenience stores, dollar stores, drugstores, schools, foodservice outlets, and more than 100 warehouse distribution centers, the company says.

There’s also a handful of products made by Prairie Farms that are distributed nationwide, including whipping cream, half & half, shelf-stable milk, UHT milk, ice cream novelties, and cream cheese.

By the numbers, Prairie Farms manufacturing and distribution operations are impressive, with specific processing plants handling specific dairy products for streamlined production. “Milk is the No. 1 product we produce,” McClelland states, noting the co-op has 30 fluid milk plants that in fiscal year 2023, which ended Sept. 30, 2023, processed 7.5 billion pounds of milk, while the 600 family farms in the co-op, with an average of 150 milking cows per farm, contributed nearly 3 billion pounds, or about a third of the milk supply.

To keep up with demand, Prairie Farms also maintains partnerships with other cooperatives as well as independent shippers, he adds.

Yet, there has been a decline in the consumption of milk in American households. “When I was a kid, you had milk for dinner, and there was no question about whether you wanted something else,” McClelland recalls. “Today, you sit down at the dinner table, and there might be 10 choices. People still recognize milk as the best nutritional bang for their buck. Penny for penny, we’re the best food in the grocery store.”

But McClelland insists that none of this would be possible without the co-op’s farm-to-table concept and local connection with local communities.

“Some people go into a job, some even go into a career, but some cherish the lifestyle, and dairy farming is a lifestyle. I would even say a multigenerational lifestyle,” he stresses. “Even for us, as I’m sitting here in the office with you, we want our farm-to-table values to be celebrated and told.

“That’s why I’ve been here with Prairie Farms as long as I have [since 1991 as a high school senior]. I talk a lot about our family and culture within Prairie Farms. Again, it starts with our dairy farmers. They’re up 365 days a year, milking two, sometimes three times a day,” McClelland continues. “Hardest working people I’ve ever known in my life. What our member farms are doing in their local communities is a great story and something we’re really proud of. It’s the foundational piece of who we are as a $4.6 billion company. It all starts with our membership, and it all starts with the quality of milk coming from the farm.”

Within the milk side of its portfolio, Prairie Farms produces premium white milk in packaging that ranges in size from half pints for school kids, 16-ounce single-serve bottles, quarts, half gallons all the way to traditional gallon jugs. White milk is offered in full fat vitamin D, 2% reduced fat, 1% low-fat, fat-free, and buttermilk. On the flavored side, Prairie Farms offers premium chocolate milk, 2% reduced fat chocolate milk, 1% low-fat chocolate milk, and an impressive number of specialty flavors like Salted Caramel, Strawberry, Chocolate P&B, and Chocolate Malt.

“In the grand scheme of things, we have a lot of volume,” McClelland says. “We still know Americans want milk in their fridge, and we want to make sure we’re providing a quality product. You can never go wrong with a cold glass of our award-winning white or chocolate milk.”

Lactose-free dairy for all

According to the National Institutes of Health (NIH), about 30 million American adults have some degree of lactose intolerance by age 20, and may experience discomfort after consuming foods or drinks with lactose, a sugar naturally found in milk and milk products, like cheese, cottage cheese and ice cream.

In response to customers who are lactose intolerant, Prairie Farms has processed lactose-free milk in half-gallon cartons since 2013.

Yet, this April, Prairie Farms will debut several new lactose free products, including lactose-free milk in conventional gallon jugs — becoming the first in the market to do so, according to McClelland.

Additionally, in April, two new cultured dairy products, cottage cheese, and sour cream, will be available in lactose-free varieties. On the Prairie Farms cottage cheese side, lactose-free will be available in 4% small curd in 16-ounce cartons. On the sour cream side, the full-fat lactose free version is hitting refrigerated cases in 16-ounce cartons.

“I’m very excited about our cottage cheese, and again as humbly as I can say it, Prairie Farms cottage cheese is the best in the country. We’re now going to have the best lactose-free cottage cheese,” McClelland emphasizes. “I’m hoping this conversation will help get the word out so we can make a big splash in the lactose-free fluid milk and cultured categories. There’s a lot that goes into making it and coordinating it. I think lactose intolerance is a big reason for a decline in consumption, and this is our way of addressing it.

“I want to normalize lactose free dairy products,” the CEO continues. “What we need to understand within the dairy industry are the excuses of why people think they don’t want to consume dairy products anymore. We at Prairie Farms are addressing them one at a time.”

Within Prairie Farms markets, the No. 1 excuse is lactose intolerance. “A lot of times, lactose-free products are value added, but I believe it needs to be made available to more people and more places,” he says.

Thus, Prairie Farms will introduce lactose-free milk in gallon jugs to the St. Louis metro area in April, with other states to follow in June. McClelland states: “Consumers have been used to half gallons of lactose-free milk, and I think this new product release will get customers used to the idea that they can have a fresh lactose-free product in a conventional jug that everyone can enjoy.”

Cottage cheese ascends in popularity

Prairie Farms cottage cheese, at nearly 3% of its portfolio volume-wise in 2023, has long been recognized for its award-winning varieties. Among the cottage cheese it produces are small curd, large curd, low-fat, full-fat, lactose free and even dry curd in several packaging sizes, the company says. Some of its cottage cheese is used as ingredients in commercial and industry ready-to-eat meals.

“Throughout the United States, I will put our cottage cheese up to anybody else’s. There’s a lot of great products out there, but we have a great cottage cheese product,” McClelland stresses. “It’s won many awards through the years.”

That’s why McClelland chuckles when someone not so long ago questioned what the company was going to do once it got out of the cottage cheese business.

“The popularity of cottage cheese was declining, but then protein hit the top of the conversation,” he explains. “Cottage cheese contains 12 grams of protein per serving, and our creamy cottage cheese is the best. If people understood how cottage cheese was made, it would be easier for them to recognize what I'm saying, with open vat and processing — it is a form of art.”

Appointed to his new post on January 1, 2022 — only the fifth CEO in the co-op’s eight-decade history — McClelland notes that he began his career at Prairie Farms in 1991 as a high school senior, working at its distribution center in Cape Girardeau, Mo.

He notes: “My motivation at that time was to have a job that would give me enough money to put gas in my car. To be honest, it’s a God thing that I was put in that place at that time. I had no intention of going to work for a dairy company, but they were hiring, and to be honest, I wanted a job that required physical work.

“…I grew up in a family where hard work was part of your day and something to take pride in, and at the time I was with Prairie Farms, it was ‘you’re going to load trucks, you’re going to drag stacks of milk.’ For whatever reason, I thought that would be kind of neat, he concludes. “The dairy business is very physical, and still is to this day, even with automation, it’s still a physical job, and it’s something that you have to enjoy and find rewarding, and I did — and I still do.” DF