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Cream of the Crop

When its dairy business was failing, this family went back to the drawing board

On a family farm, perhaps more so than in other types of family businesses, everyone gets involved. That explains why Albert Straus returned home from college in 1977, armed with a degree in dairy science, anxious to help steer the family dairy business through harsh economic times.

Straus and his siblings had grown up on their parents' 660-acre dairy farm in the rolling hills of western Marin County, California, with their share of the chores and a love of the land. Now Straus was prepared to take his involvement in the family business to a whole new level.

The era marked by the well-publicized plight of small-scale farmers across America was beginning to unfold. Once a dairy ranching empire, Marin County was home to 150 dairies in the early 1960s. Over the years, that number dwindled to fewer than 50, as farm after farm succumbed to buyouts by larger farms or withered in the face of competition.

"On a dairy farm, you have no control over your pricing," says Straus. The raw milk the Strauses' cows produced was sold to a co-op at a price mandated by the government, and prices had been stagnant for the previous 20 years. While the wholesale price of milk remained the same, the costs of production were rising.

In order to satisfy additional pollution-control regulations, the Strauses pumped hundreds of thousands of dollars into building a system to prevent waste runoff from entering nearby waterways. As expenses mounted, Straus and his father tried to stay ahead of the game, but with each passing day, it became clearer that they were losing the battle.

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This article was originally published in the November 1998 print edition of Entrepreneur with the headline: Cream of the Crop.

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