CEDAR FALLS -- The Hansen dairy empire, like demand for their milk, keeps growing.

Jay and Jeanne Hansen and family opened their second dairy retail store last week in Cedar Falls, located at 127 E. 18th St. But unlike Moo Roo in Waterloo, which features dine-in ice cream, the new Hansen's Farm Fresh Dairy Outlet is strictly carryout.

When the Hudson dairy farmers started marketing their own milk more than three years ago -- to boost revenue so their children could rejoin the family farm -- the original goal was to sell 50 percent of production, or about 700 gallons a day. That would pay the bills. The family relied on a handful of grocery stores and on-farm sales to market their milk.

Today, the family operates two retail stores, supplies dozens of groceries and restaurants, and their 175 Holsteins can't keep up with demand. Ice cream and cheese curds eventually were added to the mix, and Hansen's butter will be on the shelves soon.

"Our philosophy as self-employed people is to always make a better mousetrap. Our work is never finished," Jay said.

Customer demand dictated a second store be added in Cedar Falls, Jay said. Loyal buyers, used to conveniently picking up Hansen products at the downtown farmers' market were worried about availability when the market shut down for the season on Saturday, especially given recent supply issues.

The Hansens were selling about 65 percent of their milk locally this summer. Then wholesale and retail milk prices skyrocketed, making the family's milk cheaper or on equal footing with the competition. While most fluid milk prices increased by as much as a $1 per gallon, Hansen's stayed the same.

Jay said superior quality, freshness and especially competitive pricing contributed to the surge in demand.

"We're selling more milk than our cows can produce. The price-conscious shoppers are now using our milk," Jay said. Herd expansion to meet excess demand is a possibility, he said.

Coolers at the family's farm and retail stores will be stocked first, Jay said. Excess will be split among grocery stores and food service customers.

That sounds good to Cedar Falls residents Donna Wood and Stacy Ward. Both religiously went to the Cedar Falls Farmers' Market at Third and Clay streets to pick up Hansen's milk, ice cream, cheese curds and other products. Now, they said they don't have to drive 20 minutes to Moo Roo in Waterloo or fight crowds and parking at Hy-Vee or Fareway, which carry the family's milk.

"I'm so glad you're open," Wood blurted out as she walked into the store Wednesday to pick up some milk. "They (grocery stores) are out a lot, and I don't find it. This is a great opportunity to have a local dairy provide real fresh, quality products. I've got to know them (family) and trust their faces."

Besides selling their own products at the outlet store, the Hansens also feature fare from other Northeast Iowa farms and Midwest suppliers. Pork comes from families near Hubbard, eggs from Nashua and cheese and yogurt from Wisconsin.

Prices, except for milk, are typically about one-third to twice as high as similar products in grocery stores.

"I don't know a place around where you can buy a 5-year-old, award-winning cheddar cheese," Jay said.

The family received a $90,000 Value-Added Agricultural Product Market Development grant program from the federal government to promote their retail enterprises and for the processing and sale of nonhomogenized ice cream and butter.

Changing buying habits to make the outlet store a success is the challenge, Jay said. Moo Roo, with scoop ice cream, quickly became a family destination, he said. The outlet store doesn't have that, though someday it could.

Convincing people to drive out of their way to get milk instead of the convenience store on the way home -- especially if they don't have to stop at the grocery store -- won't be easy, Jay said. And will customers stay when milk prices go back down again but Hansen prices remain the same?

"I'll still get it," Ward said. "I like the fact they don't use any hormones (like rBST to increase milk production in cows), and it's creamier."

Contact Matthew Wilde at (319) 291-1579 or matt.wilde@wcfcourier.com.