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1 of 1--Larry Peter resurrected the historic Petaluma Creamery is cheese is being made there again. June 11, 2008. the Press Democrat / Jeff Kan Lee

Spring Hill Jersey Cheese founder revives century-old Petaluma facility, brand

For the first time in four years, the smell of cheese again wafts through the historic Petaluma Creamery.

Dairyman Larry Peter, who bought the nearly century-old production facility in 2004, is now fulfilling his dream of making gourmet cheese for supermarkets with milk from Sonoma and Marin dairy farms.

Over the past decade, Peter established his credentials by crafting modest quantities of organic artisanal varieties under his Spring Hill Jersey Cheese brand. Now, Peter is making a bid to get into supermarket chains, restaurants and food distributors with larger volumes produced under the Petaluma Creamery brand.

"We're going to build the Petaluma Creamery brand," Peter said. "I have to. I don't have any choice."

Peter borrowed $10 million to refurbish the west Petaluma creamery he purchased in 2004. It costs $6 million annually to run the 5-acre complex, which contains plants to dry milk and produce cheese.

So far, dried milk production has been paying the bills. Cheese is Peter's passion, however, and the more he makes at the creamery, the more milk he hopes to buy from North Bay dairy farmers.

"I had to resurrect it. The whole thing is keeping the milk coming from Sonoma and Marin counties," Peter said.

The creamery established by Sonoma and Marin county dairy farmers in 1913 processed milk produced by herds in the region until 2004, when Dairy Farmers of America closed the plant.

After hearing of the closure, Peter went to the creamery seeking a secretary for his Spring Hill dairy farm and cheese business. Six months later, after putting together a business plan and obtaining a federal small-business loan, he purchased the creamery.

Ambitious plan

Such bold moves have come to define Peter. The onetime warehouseman at American Door in Sebastopol, Peter got into the dairy business in 1987 having never lived on a farm. He began making cheese in 1998. Peter's new business plan is far more ambitious.

"He has a lot of ideas and certainly a lot of energy. He brings a lot of passion to what he does," said Marcus Benedetti, president of Clover Stornetta farms.

Clover and Dairy Farmers of America pay Peter to dry milk, which is used to fortify bottled milk and is sold to food processors.

A local milk processor reduces shipping costs and strengthens local dairy farms, said Ralph Sartori, a DFA regional vice president.

"He's got a nice functional plant. He's got a good local supply of milk. I think he's going to make it," Sartori said.

When he first opened the plant, Peter briefly made bulk cheese but shut down the creamery following a dispute with DFA over a milk supply agreement. A year ago, he reopened by focusing on dried milk production.

"I had to create a way to keep the power on to get the cheese going," Peter said.

Powder power

Running the drier seven days a week, Peter has managed to generate enough revenue to exceed his operating costs.

"The powder is really turning the place around. That place is a little gold mine," he said.

Cheese is the next chapter in Peter's effort to keep the creamery in business.

This month, Peter fired up the plant's cheese operation using milk from his herd of Jersey cows.

Milk is pumped from silos into a pasteurizer, where it is heated quickly before flowing into vats. A vegetable thickener is added, massive knives cut through the fluid, and it cooks into cheese.

The cheese is spread over large tables with drains to separate out the whey. The cheese curd left behind is moved to towering steel tubes that push out 42-pound blocks of cheese every 15 seconds. Those are sealed in plastic and boxed for shipping. The entire process takes about three hours.

There is a different aroma at each stage. Along the way, Peter scrutinizes the processes, such as tasting the curd.

"I want to focus on four to five flavors and do the best job I can," he said.

Those varieties will include Colby cheddar, Monterey jack, yellow and white cheddars, mozzarella, and an Italian cheese. They will be all-natural. Yogurt, butter, and cottage cheese also will be produced.

Quality and quantity

Peter's idea is to boost profits from a combination of both quality and volume.

"It's so much more efficient to make cheddars and jack here because it's so automated," Peter said. "I'm making the real hands-on cheeses out at the farm."

Even there, however, Peter plans to scale back the 30 organic varieties he now produces to brie, cream cheeses, quark, peppercorn, and several goat cheeses.

Over the next year, he plans to increase cheese production under the Petaluma Creamery brand from 6,000 pounds a week to 100,000 pounds. Production under the Spring Hill brand will likely fall from from 6,000 pounds a day to about 500 pounds a day.

To keep pace with increased production, Peter said he likely would boost employment from 35 to as many as 80 workers. Most, so far, have been past plant employees.

"I'm turning a corner," Peter said. "As my father would say, 'If you think positive, you can do anything.' "

You can reach Staff Writer Michael Coit at 521-5470 or mike.coit@pressdemocrat.com.

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