A Hedge Fund Pioneer Is Making Some of the Best Goat Cheese in America
Blue ribbons for Idyll Farms. Photo courtesy of Idyll Farms.
The owner of the award-winning Idyll Farms has a day job in finance.
Mark Spitznagel is a guy who gives new meaning to the term “gentleman farmer.”
In Northport, Mich., among rolling hills and barns that evoke the mountains of Europe, Spitznagel and his wife Amy are producing French-styled goat cheese such as Idyll Gris, which features a silvery ash coating between fluffy light layers of fragrant goat cheese. It’s one of Idyll Farms’s most popular styles, and it has gained serious cred in the world of fromage.
At the 2017 American Cheese Society Conference in July—the dairy world’s version of the Oscars—Idyll Farms walked away with seven awards, the most for any goat cheese producer in North America. Among their awards: three first place prizes, three seconds, and one third—out of some 2,000 entries. All this for a cheese maker that has been in business for only five years.
Idyll Farms began when the Spitznagels spotted a rundown farm across the lake from their summer home in Northport, and purchased it for under $1 million. The 200-acre, century-plus-old farm consisted of neglected cherry orchards, buildings that were barely standing, an aging maple syrup grove, and some creepy woods.
The six-figure investment was interesting for Spitznagel, though not for the dollar amount. Spitznagel has a full-time job running Universa Investments LP out of its Miami headquarters, with a focus on tail-hedging. (In the financial markets, a tail refers to the end of a bell curve.) Universa is known for its ability to protect assets against the all-too-frequent plummets that come at the end of a tail. Spitznagel accurately hedged against the dotcom bust and then, the historic 2008 meltdown. (When the S&P 500 plummeted 37 percent, Universa rose 120 percent.) “I argue that the [real] 2008 crisis was federal intervention,” says Spitznagel. In 2013, he penned The Dao of Capital, in which he discusses the finer points of patience, economics, and human nature.
When he and his wife bought the farm in 2010, Spitznagel’s disappointment in the market’s levers was palpable. “The world was about financialization, machine trading, and fake growth. That speaks to what motivated me about the farm,” he says. The formerly vegan financial guru believed that, with the farm, he could have one foot on something tangible: terra firma.
After buying the property, the couple considered winemaking. But wine in Michigan, even though a burgeoning category, felt like a leap. “Everyone was doing wine,” says Amy. And they wanted to create a world-class product. Their nightstand showcased where their minds were going: His side had Michael Pollan’s In Defense of Food. Her side had Goat Song: A Seasonal Life, A Short History of Herding, and the Art of Making Cheese. They kept coming back to goats. “The more we read, the more we were intrigued and motivated to start with cheese production,” she said.
Goats it was.
Their decision made, the couple visited several respected California goat cheesemakers and then traveled to the mecca of cheese: France. There they spent time with Rodolphe Le Meunier, a famed cheesemaker and affineur (a person who ages cheese). Le Meunier shared his extensive knowledge of aging the “fragile and delicate” style they preferred. “The big challenge for a goat cheese maker is to mix the good goat with the good terroir,” says Le Meunier.
Today, Idyll Farms’s herd of 200 Alpine goats, certified as humanely raised, nibble on a fresh plot of land every day of the week. Depending on what’s growing, their diet is supplemented with legumes or grasses that might benefit their milk quality. Once the Spitznagels had chosen the animals, the next-most-important hire was Melissa Hiles, their head cheesemaker. Her tasks include driving tractors, caring for the goats, and overseeing the farm. “It makes her a smart cheesemaker,” says Amy. “She can look at the properties of the milk and know what to do with it.”
“Idyll Farms’ cheesemakers did a great job making high-quality cheese this year,” says Stephanie Clark, associate director of the Midwest Dairy Foods Research Center at Iowa State University and the ACS competition chair. Another fan is Gordon Edgar, a well-known Bay Area cheese monger and author, who was a judge at this year’s competition. Edgar had never tried the farm’s cheese before the event, but after it he ranked Idyll Farms in his personal top five. “To come out of nowhere and win so many ribbons is really impressive,” says Gordon.
Despite the quality of the goat milk, most Idyll Farms cheeses are pasteurized—a heating process that kills bacteria, as mandated by the USDA—for use in their soft, fresh offerings. Though unpasteurized cheeses tend to get all the love from cheese fanatics, the farm’s top performers, Idyll Gris and Idyll Spreadable Pastures, took home first-place awards; both are pasteurized. It's a testament to the outstanding quality of the milk, which owes something to the pristine water from the Great Lakes (the biggest freshwater system in the world) and the unpolluted land around the farm.
Although Idyll Farms has yet to make it to major outlets such as Kroger Co. and Whole Foods Market Inc. (conversations are in the works), chefs are taking note. Mario Batali and executive chef Frank Langello offer it on the dinner menu at Babbo in Manhattan; you can also find it at Eataly locations in New York and at assorted Detroit restaurants. It’s also present in Batali’s fridge; the star chef has a neighboring country house in Michigan. “Amy has a sharp palette and a mind toward trends, but her cheeses are so clean, so well made and so much a part of their terroir,” says Batali. Batali’s wife Susi Cahn is also a fan—a knowledgeable one: Her father Miles Cahn launched the well-regarded Coach Farm Inc., a goat cheese company. Cahn was there to answer her neighbors’ questions, although they “never really needed my help,” she says.
Spitznagel was in Miami when Idyll took home the wins, but his wife was there to accept the awards, along with Hiles. “We were just in shock and humbled that we were able to do this in five years of production and out-win other producers that have been doing it for 30-plus years,” she says.
Turning his attention from cheese to finance, Spitznagel foresees more doom for the economy. His complaint with today’s market is that “we intervene in naturally healthy processes.” By “we,” he means the federal government. “There’s another meltdown coming. It should happen, but then again, I’ve said this before. We have never been this extreme before—that manipulation of interest rates—and I think the end game is going to be extreme.” Spitznagel’s advice: “I would tell anyone that they should own real, tangible, sustainable assets.”
Still, Spitznagel doesn’t foresee leaving the financial world for that of goat cheese any time soon. He believes hedge funds remain a safe haven for investors who aren’t looking to go back to the land.
When pushed to explain Idyll Farms’ success, Spitznagel points to Amy as the one who makes decisions on the farm. For her part, Amy points to Hiles, the farm’s manager. “I don’t want to overstate how much I am involved in the farm. The farm provides a safe haven, both mentally and physically,” says Spitznagel. “The gratification is psychological. It’s in the distant future.” The creamery, he says, is more a lifestyle investment than a business venture, a wonderful place to wander in his mind and to enjoy when he’s older.