Iwig Family Dairy seeking $650,000 in donations to stave off liquidation

Marty Falkenstein, a manager for the Iwig Family Dairy store in north Lawrence, stocks the refrigerator on Tuesday. The dairy hopes to raise 50,000 through online donations to pay off debt.

The milk is still fresh, but the financial situation at Tecumseh-based Iwig Family Dairy is souring.

The family-owned dairy that operates two retail stores in Lawrence is turning to an Internet campaign to try to raise $650,000 in donations to stave off a potential bank-ordered liquidation.

“We need to get out from underneath the bank,” Tim Iwig, owner of the dairy said Tuesday after announcing that he had started a campaign on the fundraising site indiegogo.com.

Iwig said his Topeka-based lender is being pressured by the Farm Service Agency to liquidate the dairy’s 108-acre farm and 65-head of dairy cattle. Iwig Family Dairy has been under bankruptcy protection since November, but he said he’s now been informed that he needs to come up with money to pay off the bank by late October.

Iwig said a combination of a two-year drought that greatly increased feed costs for his cattle and the lack of federal disaster assistance for the dairy industry has been tough on his farm, which is more than a century old.

“The federal government is making grain farmers wealthier than they ever have been, but there is no program for dairy,” Iwig said.

So Iwig said he hopes that loyal customers of the dairy, which serves its milk in glass bottles and uses an old-fashioned pasteurization process, will step forward and make donations.

“We need to pull some money together in October,” Iwig said. “We don’t need to pull it all together by then, but we need to make a really good start on it. What we really would like is to talk with an investor who could work with us and get us to a point that we need to be with this business.”

Iwig said he thinks there’s a strong market for his company’s milk because the slow, low-heat pasteurization process produces a milk that is easier for people to digest and retains more of milk’s natural health benefits.

“If we could have more money for marketing, we could really let consumers know the difference in our milk,” Iwig said. “Then I think we would take off.”

Currently, the company has a Topeka store, a store at its Tecumseh dairy grounds and two Lawrence stores — one at 19th and Massachusetts and its newest location at 622 N. Second St. in North Lawrence.

Iwig said the North Lawrence location is slowly building a following, and he said he would like to replace his 19th and Massachusetts store with a new location in West Lawrence. He said the company also would like to open a store in Manhattan.

But the first order of business is taking care of the bank. Iwig said he thought he had developed a business plan that would allow the company to emerge from bankruptcy in a stronger position. But that plan revolved around winning a contract to take grain waste from Topeka’s Frito Lay plant to feed his dairy herd. When Iwig lost out on that feed supply, he started looking for less traditional methods, including the idea of a donation campaign.

“I have customers say all the time that they don’t want to lose us,” Iwig said. “They don’t know what they will do if they can’t buy milk from us, and they really love our ice cream. I know it is a lot of money, but you never know. We’ll put it out there and see where it goes.”

People looking to donated can go to the campaign page at indiegogo.com/projects/last-dairy-standing