The Swiss first gained a reputation as excellent dairymen in Marin and Sonoma Counties, where large herds supplied milk products to San Francisco and the Sacramento Valley. The excellent progress made by early settlers in the dairy industry of San Luis Obispo County's North Coastal area was good news to the Swiss of Marin and Sonoma Counties. The Swiss were inclined to help their friends and relatives establish their own operations when they entered the United States, and land in the Marin and Sonoma areas had become very expensive and prohibited further expansion in that area. When more Swiss immigrated to California, they were directed to the Central Coast area. This land, with its native grasses on rolling hills, its ample water, and a cool, even climate, was ideal for dairying. These Swiss were hardworking and wanted their own land. They would work long hours at very hard labor, save their money, then purchase their own ranch.
Many of the early Swiss dairymen leased small farms from the Piedra Blanca ranch holdings of Juan Castro and George W. Hearst. As lease fees increased, many of these Swiss left and leased land elsewhere or purchased their own ranches along the coast—in the Santa Rosa Creek area, Green Valley, and Harmony Valley.
The Swiss purified their butter by cooking it. They used large wooden churns, each of which had a big paddle attached to a turning post. A horse hitched to a beam extending from this post walked continuously in a circle until the churning was completed. In order to have palatable butter at home throughout the dry season, the Swiss made what they called "cooked butter." Fresh butter was put on the stove and slowly cooked until it was a golden yellow. While it was cooking, it was periodically skimmed. The heat was carefully controlled during the sterilizing process. After remaining impurities had settled to the bottom, the butter was loaded into molds and stored in a cool place until needed. Old farm families claim that butter prepared in this way never turned rancid.
The Harmony Creamery chapter began in 1863-64, but these were the unlucky years of a devastating drought in San Luis Obispo County, so very little was established until 1869.
Most ranchers at this time lost all of their herds of cattle. This forced them to re-analyze their business. Before the drought, the area had been mainly used to graze cattle that would provide beef, hides, tallow, and horns. But ranchers began to see the potential benefits of a dairy business in the area. They could immediately invest in a few improved dairy stock for production of butter, and would recoup their losses sooner than if they were to buy completely new cattle and have to wait two to three years for their herds to be rebuilt. The local farmers were convinced that there was a real value in the dairy cow as a source of income, so they started improving and increasing their stock. By 1865, most ranchers had also branched into wheat and other grains for additional income.
By 1869, North Coast dairying was of top importance to the trade and shipping business; farm produce was picked up at San Simeon Bay at regular weekly intervals. Records of the major shipping firm, "Goodall, Nelson, and Perkins," show $30,000 worth of butter left the port of San Simeon for San Francisco in this company's ships between January 1 and July 1 of 1869.
In November of 1869, a Mr. Ivans and a Mr. Everett established a cheese factory in Harmony. It was considered a major addition to the area. The first years of the cheese-making company were stormy, and by 1871, the factory was sold to two men named Bower and Black, who operated under the name of "Excelsior Cheese Factory.” In 1871, they were producing cheese at an astonishing rate of 1,100 pounds a day from 9,000 pounds of milk. This cheese was sold at 17 cents a pound at wholesale. The plant consisted of a 40 to 50-foot two-story building, and was outfitted with the most modern equipment New York could supply. The product was said to be of high quality and competitive to New York cheeses.
In 1871, the plant was operated by a Mr. Polly. Another dairyman, named Silas Williams, arrived at this time and was employed as an experienced cheesemaker. After the 1873 season, Silas Williams left and went to work for another company. In January of 1874, Williams and a partner named Purdy purchased the plant and operated it under the name of "Williams, Purdy, & Company." The company advertised itself as making cheese on the plan of the famous cheesemakers of New York. The plant operated as a co-operative, keeping a percentage of the net proceeds as their share. All money remaining after expenses were paid and the creamery had taken its percentage, went to the dairymen. The dairymen found this method of payment more satisfactory than the normal arrangement.
In September of 1874, the cheese factory was closed. In 1875, the factory was under a forced sale to settle the estate. Assets were listed as a large building, a dwelling house, outhouses, implements, a new steam engine, and several acres of land. No documentation has been found regarding ownership or operation of the factory for the next several years.
In 1907, Marius Salmina, a small dairyman in Harmony Valley, opened a cheese factory on a ranch belonging to his brother. Mr. Salmina's product was good, and he gained the support of the local ranchers. In 1908, a Mr. Nelson, who owned the property on which the early cheese factory was located, offered to loan his property to Salmina as a better location with more room for installation of equipment. Nelson thought the offer might be of considerable benefit to the area's ranchers.
After some hesitation and much urging by his brother and others in the area, Salmina accepted the offer. C.L. Mitchell of San Francisco, Federal Butter Inspector, was very instrumental as an advisor to Mr. Salmina advising him to obtain the Harmony plant. Mr. Mitchell joined the Challenge Cream and Butter Association in 1910 as its first manager, a position he held until his retirement in 1947. Mitchell was vital to the success of the Challenge Cream and Butter Association in that he and a colleague named Witmore invented the first all-metal churn.
Mr. Mitchell was instrumental in helping form a co-operative and later in inviting the Challenge creamery to join his association. Mr. Salmina's operation was known as The Diamond Creamery. In 1909, he celebrated the opening with more than 1,000 dairymen and their families attending. Then, in 1910, he married Ida M. Donati, "a charming girl from Harmony.”
At the time the creamery was established, its only competition was the Maple Grove Creamery, located in Cambria and Cayucos. The increased business plus the continued operation of the cheese factory in Cayucos brought more work than Mr. Salmina could handle as a private owner. This led Mr. Salmina to consider the possibilities of a co-operative. The ranchers were hesitant to form another co-operative because of their past experiences with them.
Mr. Salmina continued to explore the possibilities of a co-operative, but in the meantime he started a cream improvement program. The cheese made by the creamery was excellent, but their butter was not satisfactory, due to the poor quality of cream delivered to the plant. Mr. Salmina instituted a program in which a premium was granted to the farmer based on the quality of the cream delivered. This approach encountered much opposition, but it was tenaciously adhered to. The plan was continued through the life of the Harmony Valley Creamery Association and was considered crucial to its success. Several new creameries were started in the area and competition for product increased. Mr. Salmina found he was unable to make money on butter, so he quit the production of butter and turned to making cheese exclusively.
The dairymen were unhappy with prevailing conditions and urged Mr. Salmina to start churning again. They were freely talking about a co-op. Several meetings were held, during which 20 dairymen agreed to form the nucleus of what became the Harmony Valley Creamery Association.
Challenge Cream and Butter Association and its manager C.L. Mitchell were instrumental in encouraging and aiding the organization. The new cooperative was incorporated in September of 1913 with 20 members. Four of the dairymen also reserved membership for their wives. The original co-operative was thus started with 24 members, each contributing $100, thus creating an initial capital of $2,400. The plant was rented from Mr. Salmina at $100 per month for a period of one year, with the shareholders having the right to renew on a year-to-year basis. Mr. Salmina was employed as a manager at $100 per month. He was manager, bookkeeper, tester, receiver, grader, butter cutter and packer, and cheese maker. Also employed was a butter maker who acted as fireman and engineer. A third employee was added after three months, and a fourth was added for the two months of the busy season.
Enough money was made in the first year to pay $8 on each membership certificate. At the end of the second year, a new member was added and a truck was purchased. Membership continued to grow until in 1936 there were over 400 members. A garage and cold storage were added along with new equipment.
In 1915, a post office was added with Mr. Salmina as postmaster, a position he held for 20 years. That same year, the association became a subscribing member of the Challenge Creamery and Butter Association, creating an assured market for all the dairy products the members could provide.
The Association purchased the land and plant from Mr. Salmina. In this year, Harmony Valley Creamery Association became a member of the Challenge Cream and Butter Association. The cost to join Challenge was $3,000. After the first year as a member, the Association received a distribution of $1,000, receiving its investment back in one year.
Electricity was added and in 1924, the Association expanded to take in the Cal Poly dairy plant, which had been idle for several years. The plant was operating under an arrangement with the faculty, in which the plant was leased and the Association agreed to furnish practical instructions to young men pursuing the study of dairy products manufactured at the school. This arrangement continued for two years but proved impractical, as the plant was located too far from town. The distance from town meant a second receiving station had to be opened, and this was not cost-effective.
Sentiment was strong among members to open a second plant in San Luis Obispo for the production of milk. The production of milk required a plant close to the population center. Producing the milk in Harmony and hauling it 35 miles to San Luis Obispo was not practical. There were several other problems at Harmony. The increased success of the plant posed problems because of a shortage of water and the lack of adequate sewage disposal facilities. The Association was already accepting members from San Luis Obispo and could not easily drop those members. Members from San Luis had been receiving less for their products than those in the Harmony Valley Creamery Association.
All of these factors led to a decision to expand to the San Luis Obispo area. Many members opposed this expansion. In November of 1929, after many meetings and personal contacts, the Association finally voted to expand. On May 1, 1930, the San Luis Obispo plant was opened for processing, while the Harmony plant was to be maintained as a collection depot for the North Coast area. In addition, a small co-op store was to provide dairymen a place to purchase clothing, dairy equipment, canned goods and products manufactured by the Association. A garage was maintained in conjunction with the creamery to service members' trucks and the association's equipment and to do occasional work for Association members.
Membership peaked at 400 in 1936. By 1964, there were only 53 members. Although the membership had dropped, the level of production remained about the same as when there had been 400 members, due to the use of improved methods and machinery.
As supplemental feeding methods brought year-round milk production, other sections of the county began to engage in dairy operations. The Cambria area, less suited to large-scale dairy farming due to lack of sufficient permanent pasture fields, declined in importance as a dairy center.
The Association continued under the Challenge and Butter Association until 1956, when they again became independent. Cheese and butter making were discontinued in 1958, and the operation switched to handling bulk milk for pasteurization.
During its peak years, Harmony Valley Creamery Association contained a manager's residence, a bunkhouse, a garage, a blacksmith's shop, a service station, a cook house, a cold storage area for cheese, a warehouse, and the main creamery building. During its last years of operation, there were 10 men working in the plant, as well as two mechanics, two truck drivers, the manager, and a bookkeeper. The post office has operated continuously since 1915.