Mongolia is a country of long, rolling steppes, with a population density of only two people per square kilometre, well-suited to the traditional occupation of herding animals. Even today, while the capital, Ulaanbaatar, is a large, reasonably modern city, 40% of the country’s population still live as nomadic herders, raising six animals which all give both milk and meat: cows, sheep, goats, yaks, horses and camels.
“I came to a conclusion that was pretty obvious. There are about a billion litres of milk laying around the [Mongolian] countryside, for which there is no market,” explained Michael Morrow, the American-born Cheeseman of Mongolia. Cheese making would create an income stream for herding families. It would also diversify and increase Mongolia’s exports, while helping the country to move up the value chain. Through the Mongolian Artisan Cheese Makers Union (MACU), founded in 2015, Michael hopes to establish 100 cheese plants, in rural, herding communities, teaching local people to produce 2,000 tonnes of cheese per year.
Michael Morrow, the American-born Cheeseman of Mongolia.
Michael has lived four lifetimes, first as a war correspondent in the Vietnam War, then as a businessman in Hong Kong and subsequently in China, and now as Mongolia’s Cheeseman. Starting with his work as a correspondent in the Vietnam War in 1966, Michael says he has spent his entire adult life in Asia. Eventually, he found himself based out of Hong Kong, running a technology company. When he decided to leave the company, around 2012, they asked him if he would be willing to take over the only non-performing investment he had made as director, the company’s subsidiary in Ulaanbaatar. Michael had been to Ulaanbaatar several times, over the years, and by 2014, he found himself running his own small company there.
Michael made a friend in Mongolia, named Tumurkhuyag, who was on the brink of bankruptcy. He had borrowed $15,000 from a bank, in the 1990s, to start a small cheese company, and suddenly discovered he owed $60,000. Tumurkhuyag had originally taken the loan from a bank which collapsed; now, nearly two decades later, the state bank had contacted him to say that they had bought up the assets of the defunct bank, and that Tumurkhuyag’s debt was now owed to them, including about 20 years of interest payments.
Michael was so outraged that an honest person could be caught in such an odd mess of bureaucracy, that he became involved. He negotiated with the bank, saying that if they would forgo the interest payments, he would repay the $15,000 principal. In the end, Michael found himself a partner in a very small Mongolian cheese company, an industry he knew nothing about.
Tumurkhuyag showed how to make a good quality cheese without the need for a major plant.
The “company” was a single building with a few vats and processing machines, out in the countryside, 80 kilometres from Ulaanbaatar, where there was no market or distribution for the cheese they produced. “It was a place that was hard to find and hard to live,” remembered Michael. The remoteness of the location and the harshness of the life, in a country where winter temperatures regularly drop to -40 Celsius made Michael respect the hard work Tumurkhuyag had already invested in the company. When he sampled the cheese, Michael was impressed with how good it was, giving him hope that maybe the company could be expanded into something more profitable. “He made a good quality cheese and showed me that you could do that without a big factory,” said Michael.
Cheese making as compensation
How Tumurkhuyag learned cheese making and how the art came to Mongolia in the first place relates to the Przewalski's horse which dates back to Genghis Khan. The Mongolians call the horse takhi, a name of reverence, meaning “spirit.” As the only breed of horse that has never been broken, Smithsonian magazine calls the Przewalski's horse the last truly wild horse left on Earth.
The Przewalski’s horse has played an unlikely role in the emergence of Mongolian cheese making (Image: Claudia Feh, CC-BY-SA 4.0).
The Przewalski’s horses nearly died out. European zoologists tried to conserve the animals, breeding them on preserves in various countries. At one point, there were as few as 12 breeding stock left. By the 1990s, however, the breed had made a comeback, reaching close to 1,000 animals, protected in multiple countries, on more than one continent. At that point, the decision was taken to reintroduce the horses into the wild. Mongolia had just transitioned from being a Soviet satellite to a democracy, keen on cooperating with the West. In 1993, the Mongolian government created Hustai National Park, about 80 km from Ulaanbaatar, as a Specially Protected Area for the reintroduction project of the Przewalski's horse. The Dutch government was instrumental in helping to support the establishment of the park and over time has underwritten a number of its ecological initiatives.
Tumurkhuyag had been a hunter in the area as a young man, before becoming trained as an accountant. He knew the wildlife in the area and was given a job with the park, helping to establish its boundaries. In addition to the Przewalski's horse, other protected species would find refuge there, including deer and elk.
Due to the establishment of the park, many local herders lost their grazing lands. “The Dutch, being Dutch, thought the best way to compensate people was to teach them how to make cheese,” said Michael, with a smile. “But almost all of them forgot everything they learned as fast as they learned it. The Dutch gave them some basic equipment, and they sold it. But Tumurkhuyag didn’t.” In the process, Tumurkhuyag “became the father of the concept of pastoral cheese in Mongolia”.
Conducting research, Michael came across reports from foreign organisations, which said that dairy had no future in Mongolia. One issue is that, because of the extreme weather conditions, the window of time, when milk can be collected, is extremely narrow. “But, I disagreed,” said Michael, defiantly. “Tumurkhuyag had managed to survive very far from the city, with no natural distribution, and only one type of cheese. So, if you had 100 people, all around Mongolia, all making different kinds of cheese, and if they had a network to help…”
Tumurkhuyag’s little company could only make cheese in summer, and because he had no heating, he had to sell it before winter, or it would freeze. As the cheese plant was far from the city heating grid, Michael devised a coal-powered heating system for the cheese. Later, he learned that there also had to be humidity control, or the cheese would become dry.
Thanks to a coal-powered heating system devised by Michael, Tumurkhuyag can also now make cheese in the winter.
While being so far from the city was detrimental to distribution, it did mean that the company was close to the source of milk. So, there were some advantages which convinced Michael that the plan was feasible.
Michael was confident that Mongolia could make good cheese. It is one of the last places on earth where all of the animals are free range, grazing on natural grass and herbs. Additionally, “although they don’t give a lot of milk there are a lot of them”, he pointed out. As he was trying to work more closely with the herders, Michael began to understand their culture and the challenges they face. This led him to conclude that there was a significant social component to the project.
Mongolians, particularly mothers, are very concerned about the education of their children. Out on the steppes, there are no schools, so at the end of summer, each year, the family will pack up their children and send them to live with relatives in villages or towns, so that they can attend school. The herder economic cycle is such that they have very little cash for most of the year. They receive no salary and only earn money about twice a year. In the spring, they get money for the sale of cashmere, and in the autumn, they get money for the sale of animals for slaughter. School fees, however, must be paid in August, a time when many families have no money. Cheesemaking, Michael discovered, would create summer income for these families.
Participating in a cheesemaking project would mean doing a bit more work, milking the animals. Coincidentally, milking is generally done by women, and it is the women who are most concerned about raising school fees for their children. This meant that cheesemaking could fit well into the existing culture of the nomads. The mothers generally wake up early, milk the animals and have the work done by the time the family wakes up for breakfast. The cheese business, as Michael envisioned it, would create an income of about $1,000 per summer for a herding family. In a country where the average income is only $4,000 per year, this is a significant sum of money, and many times what is needed to pay for children’s education.
Michael explained how the arrangements had been working so far, saying, “The women want to be paid by August 15, so they have money to send the kids back to school.” The cheese work continues into the autumn. “They will calculate through the end of the season, but want to be paid in advance by August 15,” adds Michael. Credit is a tremendous problem in Mongolia. By some estimates, as much as 80% of the population is in debt. Paying the herders in August, meant that they would not have to borrow money to send the children to school. Breaking the cycle of debt may be one of the most significant socio-economic outcomes of this arrangement.
Additionally, there is an environmental component to the cheese business. Currently, cashmere is valued much more highly than meat or milk. However, the increasing number of goats, necessary for cashmere, has been largely to blame for the degradation of 70% of the Mongolian grasslands. If a herder wishes to earn more money, the two options are to raise goats for cashmere, or raise more of the other animals for meat. Cheese gives them a third option, one which increases their income, without increasing the number of animals.
Placing cheese plants in these remote areas would increase local income, ensure that children are able to attend school, preserve the grasslands and also create a few jobs in the plants themselves.
The model cheese plant
“I did some analysis and decided his [Tumurkhuyag’s] business was not efficient but the problems were fixable,” said Michael. In 2015, Michael began studying cheese production, eventually designing the small cheese plants he would go on to build. “Everyone thought I was nuts, including my wife. By then, I had discovered there were a few other small cheese makers in Mongolia. So, I went out and met them and thought I could organise them into a network to solve the distribution problems, but I got nowhere, because Mongolians are very distrustful even of each other,” he added.
By nature, herders are fiercely independent, which complicates attempts to organize them. Michael thus went on to set up the Mongolian Artisan Cheese Makers Union (MACU), the original purpose of which was to do sales and distribution for remote cheesemakers. The cheesemakers, however, refused to give Michael cheese on credit. They were too small to let him take the goods on consignment, and needed cash up front. This meant that Michael had to come up with large amounts of cash and had to incur all of the risks himself. Next, he found that when he bought cheese from the cheesemakers and placed it in grocery stores, the makers would then go to the grocery stores directly and undercut him.
This led Michael to develop a financing model which he began first with Tumurkhuyag and later used with others. Under this system, he would place orders at the beginning of summer and pay in installments, with part at the end of summer and a final payment at the end of the year, although the actual work would extend into the autumn.
He realised that there was a need to make multiple cheeses and that he needed a model cheese plant to show to investors and prospective cheesemakers. So, by 2018, he had built an analogue, just outside of Ulaanbaatar. Given the close proximity to the city, the price of milk near the model plant is too high to do actual cheese production, but it can serve as a training school for new cheesemakers.
The cheese plant measures just 10 metres by 10 metres.
Michael’s next step was to send his wife to France to study cheesemaking. Once she returned, she began teaching the required skills at the model cheese plant. The plant is an exercise in simplicity. It occupies only one hectare of land, with the building itself, measuring 10 metres by 10 metres. There are two gers (yurts) for workers to live in, out back. The plant has its own transformer for electricity and gets its water from a well. The building is designed so that the workers are in the centre, while deliveries and shipping occur at various doors, around the outside. This saves space and means that the workers and the cheese move around very little. Michael’s vision is for this model to be replicated in communities across the country. There are six projects already in progress, with one scheduled for 2021, in Dornogovi Province in the Gob Dessert.
One of the two gers (yurts) that the cheese plant workers live in.
The plant currently makes 20 kinds of cheese. Each kilo of cheese requires ten kilos of milk. The curds can be dried and sold and the whey can be made into candy or drinks which have a higher value than milk. Moving forward, the hope is to add whey processing to the cheese plant. Due to the Covid lockdowns, with schools and hotels closed, herders lost their milk income, so the government has offered to buy each kilo of milk for 5,000 Mongolian tugrik ($1.75) over the market price. This would increase the price of a single kilo of cheese by 50,000 tugrik, a price the market cannot bear. Consequently, there is a shortage of cheese and the only cheeses available are the hard cheeses which were made and stored last year.
The Ulaanbaatar cheese market, explained Michael, is price sensitive, unsophisticated, and small. And so, export markets had to be found. It is, however, not easy to export cheese from Mongolia. Food is subject to strict regulations in both the export country and the import country. And each import country has its own, unique regulations. Being approved for one country does not guarantee being approved for another. Not only is cheese food, it is also classified as an animal product and a dairy product, making the restrictions even more stringent.
Clearing the export hurdles would be a boon for Mongolia’s cheese industry. Michael estimates that 100 cheese plants could produce 2,000 tonnes per year. “China alone consumes 200,000 tonnes, Korea 200, Japan 300 and Russia 500,000 tonnes. Not all of that is high end cheese. At the high end of those markets is say 50,000 tonnes. As a conservative number, it is not impossible to sell 2,000 tonnes of Mongolian cheese into such a large market when we can compete on quality and price.”
Artisanal cheese from the steppes
“This is the only place in the world where you can make cheese from animals grazing on wild grass. The great Mongolian commons is the only [such] place in the world left,” said Michael. “We are an exotic supplier. And, we not only have cows we have goats and sheep and horses and yaks and camels.”
Currently, yak cheese is being used to make yak cheddar in Ovorhangai Province. They have had goat cheese in the past and plan to make more in the future. Of all of the milk-giving animals in Mongolia, the horse is the only one whose milk cannot be used to make cheese, because the lactose level is too high. It can be used, however, to make the Mongolian traditional drink of fermented horse milk, called Airag (kumis).
Michael’s vision is for Mongolia to become a niche producer of exotic, high-end cheese which differentiates itself in quality and uniqueness. Mongolian hoofbeats will, once again, find their way to Japan, Russia, Korea, and the world.