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For Nielsens And Wapsie Valley, Independence Is More Than The City, It Keeps Them Growing

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Fourth Generation Faces Same Needs As First Three; Whey Is A Concern

Independence, IA—The Nielsen family has been operating the Wapsie Valley Creamery here in Independence, IA, for over 90 years and the next generation has stayed as loyal to the plan as the first three.

Wapsie Valley is now in its 111th year as an independent dairy company and plans are well underway to expand processing capabilities to keep it in the family.

The company has always been conservative by nature when it comes to expansions, Mark Nielsen, president of Wapsie Valley, said, but starting early this decade, the company has put a large emphasis on growing the company.

“Growth happens around here when milk is available and there is a healthy return,” Mark Nielsen explained. “We felt now was the time that we needed to become more efficient with the consciousness of the labor market.”

Wapsie started its expansion plans by adding an entire new cheese production area that included six 55,000-pound APT (Advanced Process Technologies) vats and four APT advanced finishing vats.

“We try to do everything with the mindset that in 20 years from now, everything will still look nice and operate efficiently,” Nielsen said.

The goal for the cheese plant is to process 3.3 million pounds of milk per day, an increase from the current production of 2.1 million pounds.

“We used to make about 12 vats a day, now we’re making about 28 a day,” Nielsen said. “But it’s really like 50 since we’re concentrating the milk and the vats are so much bigger than they used to be.”

Wapsie Valley’s next step is to update the company’s 640-pound cheese packaging line and the company will also look at updating its separators.

Ryan Nielsen is the fourth generation of Nielsens to work at Wapsie Valley. He serves as executive vice president of the company.

“We need to more efficiently package our 640s,” Ryan Nielsen said. “We have an old system from the 1990s that is very labor intensive. Pushing those blocks around is tough work when you’re doing it eight hours a day. We need to make the jobs easier so we can attract and retain good employees.”

To handle the extra production, the company recently completed a new cheese cooler expansion that is capable of holding 15 days worth of production if needed.

Wapsie Valley currently manufactures Colby, Colby-Jack, stirred-curd Cheddar, Monterrey Jack and Muenster. The company can also make a little Havarti and some Hispanic cheese.

All of the cheese is made into 640-pound blocks and sold to converters who cut, slice or shred the products. The company doesn’t sell any of its cheese directly to consumers.

“We’re much more engineered for the production of cheese and not so much designed for the sales and marketing of it. We have many good, long-term customer relationships,” Mark Nielsen said. “They’ll take all the cheese we make.”

The Whey Operation
While the demand for cheese has been growing, the whey side of things are currently flat, said Mark Nielsen.

“On the whey side we have some availability for new customers,” he said.
Taking the plant to the next level is slowed by the whey side of the business, Ryan Nielsen believes.

“There are a lot of things we can do once we bump milk intake to 3.3 million pounds, but if we can’t handle it on the whey side, we’re not taking full advantage,” Ryan Nielsen said.

Currently the company manufactures lactose and reduced lactose whey powder.

The company owns the open lot across the street from the cheese plant that could be used to house what Ryan Nielsen hopes is a modern, state-of-the-art whey operation.

“I’d like to get a new evaporator and possibly a membrane plant and a new dryer,” Ryan Nielsen said. “The key will be making a premium product that has a better return than the current whey products that are viewed as a commodity.”

Mark Nielsen also agrees that something has to be done on the whey side.

“My biggest concern is how the government is figuring the whey price,” Mark Nielsen said. “Whey returns are not good right now. My biggest concern is that the whey price is out of line with whey returns. You almost have to sell whey at 80 cents a pound just to pay the farmer.”

Wapsie Valley History
They often say history repeats itself. Wilbur Nielsen was born in the very same year that his father, Clarence, began working at Wapsie Valley.

Wilbur held the position of president from 1960 to about 1990, though neither he or Mark Nielsen could really remember.

“My dad came from Denmark when he was 16 and he went to the University of Minnesota,” Wilbur Nielsen said.

At that time, small dairy plants were more abundant because farms couldn’t ship milk too far away, he said.

Wilbur Nielsen described how Wapsie Valley was one of the first dairy plants to innovate to a continuous buttermaking process.

“I came here when I was 14 years old. In 1941 we moved from a plant down the street up to this building and we started to make cheese,” Wilbur Nielsen said.
When Wilbur became president in the 1960s he knew the company needed more milk to compete.

“We need to get bigger, more efficient and to be able to utilize the entire process.”
—Ryan Nielsen, Wapsie Valley Creamery

“We had a bunch of small patrons, particularly from the Amish. A lot of can milk. We went from small wooden vats to some big open vats and carried the curd on a belt and made very labor intensive longhorns and some 40 pound blocks.”

Also in the 1960s Wilbur Nielsen said his company was one of the very first companies to put in a single effect evaporator.

“We were ahead of the game in whey,” Wilbur Nielsen said. “We put in an early evaporator. Eventually we got into the lactose business and we kept moving up the ladder adding spray dryers and the like.”
Wilbur Nielsen would also go to nearby cheese plants and collect their whey as well.
“They weren’t doing anything with it. It was a real money maker for us. Whey was really where the money was.”

Where The Milk Comes From
Currently Wapsie Valley has about 270 patrons, Mark Nielsen said. The average number of cows per farm is approximately 100. Much of their milk comes from Iowa, but due to the proximity of their plant, the company reaches into Illinois and Wisconsin as well.

“We don’t see a lot of consolidation over in our neck of the woods,” said Mark Nielsen. “The big guys are getting bigger and the mid-size farmers are getting bigger. For the most part everyone has the milk they need.”

The milk to expand its operations will come from the growth of its farmer patrons but also from the recent closing of Twin County Dairy in nearby Kalona, IA.

“One of the biggest changes and I guess challenges we’ve seen here is that we used to compete with a lot of cooperatives.” Mark Nielsen said. “But now with all the consolidations of processing companies, we’re competing with a lot of foreign-owned companies. They’re more long-term strategists than what we are use to around here. Our customers and our patrons like that we’re a family business and that we’re pretty nimble. If they want something, five minutes later we can get on the project.”

Future At Wapsie Valley
Ryan Nielsen said the company doesn’t make large capital expenditure decisions as quickly as it can make a vat of cheese or pick up some extra milk, however.

“We need to finish our plant,” Ryan Nielsen said. “Right now we’re at 2.1 million pounds of milk a day; we need to get to that 3.3 million pounds a day. The cheese production area is sized to handle that. We need to figure out the whey side, but we won’t make a decision until we feel confident it will be a good investment. We don’t want to make any mistakes.”

Mark Nielsen said, much like his father Wilbur said, that the company needed to process more milk to compete.

And to Ryan Nielsen, to continue to compete, more cheese and constant improvements must be made to stay independent.

“We have all these quality improvement programs coming on-line and we need new employees to run those programs,” Ryan Nielsen said. “We need to get bigger, more efficient and to be able to utilize the entire process. We have great demand for the cheese, and we feel that if you’re not going to grow you’re going to get swallowed up and consolidated by someone else.”

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