Arson destroyed its creamery. Fresno County raw milk dairy rebuilding with $10M USDA-backed loan
Raw Farm LLC near Kerman was awarded a $10 million USDA-backed loan it will use to rebuild its creamery that was destroyed by arson last year. Photo contributed
Written by Edward Smith
More than a year after a blaze destroyed the creamery of California’s biggest raw dairy producer, a new facility is in the works — powered by a $10 million loan three years in the making.
Raw Farm LLC near Kerman — formerly Organic Pastures Dairy Co. — is unveiling to leadership the design for its new creamery Wednesday, said Aaron McAfee, president and co-owner of Raw Farm.
On Jan. 8, 2022, the dairy’s creamery burned, and while there were no injuries, it resulted in a near-total loss, McAfee told the Fresno Bee at the time. The cause was later found to be arson, McAfee told The Business Journal.
The fire came at a time when business for Raw Farm was spilling over because of greatly increased consumer demand.
“There is some sort of inertia, call it an awakening, call it consumers finally getting it, call it great luck, but sales are double, literally double,” McAfee said.
To continue raw milk operations, they signed a lease at the former Bravo Farms cheese processing plant in Fowler and at another facility in Hanford, spreading operations out over two counties. McAfee described business as “crazy and inefficient.”
The new facility will reunite employees under a single roof, McAfee said. They contracted with Paul Miller of Vernal Group in Fresno to design the building. Miller also designed their milk barn back in 2017, which McAfee said “changed their whole life” with efficiencies and improvements to cow comfort.
They are using Fresno-based BMY Construction as the general contractor.
McAfee hopes to have the creamery built by June 2024. They are well into the permitting process. Raw Farm is projected to do $25 million in sales this year, McAfee said. The 20,000 square-foot, $5 million facility will allow them to exceed $100 million in sales, he added.
Funding for the project will be enabled through a U.S. Department of Agriculture loan the company applied for back in 2020 through the CARES Act.
McAfee said they signed a letter of intent back in July 2020, and while it was approved within a couple months, the USDA qualifying terms made the process overly stringent.
The operation was able to qualify for the money made available through the federal government’s Covid relief program. Normally, having cows, land and almonds would have excluded them from eligibility, McAfee said, but the loan helped the operation, so they moved forward.
The government guarantees the $10 million loan up to 90%. But in addition, Raw Farm had to come up with 100% collateral and pay off previous loans, meaning they had to come up with $6.7 million.
McAfee said the loan application was written in a way almost no one could qualify for it.
Greater Commercial Lending out of Reno, Nevada, financed the loan. McAfee said they have been a great partner.
Getting the new facility positions them for the future, McAfee said. While they have very little competition in the market, he expects that to change in the next decade. He wants his company to be ready for when other dairies get into the raw, fresh milk market.