On May 11, 1896, the Diamond Mountain Creamery was incorporated which consisted of William Brockman, John T. Masten, Charles Lawson and M.W. Hoffman. In their initial stock offering they raised $4,750, far short of their goal of $10,000. However, that did not prevent them from their goal of a creamery for the Honey Lake Valley.
Shortly after the formation, they purchased a small parcel of property at Johnstonville from Edward T. Purser for $5.00. A bargain price to be sure, until one read the fine print. Purser required that the creamery be up in operation within a year producing butter and cheese. In addition, the property would have to be used as a creamery for a period of five years.
With the aid of a loan from the Bank of Lassen County, the creamery was built and placed into operation in the fall of 1896. Spellier and Drodge were hired to operate it, however, under their tenure it was a failure. Much of the cream was lost in the separating and the butter was of an inferior quality.
Enter, W.T. Mitchell, who was hired to turn around the situation, which had perplexed other local creameries with no one having the skills to operate one. Under Mitchell’s guidance 70,000 lbs. of butter and cheese were produced, bringing an income of $13,761.83. When all the debts were paid, the creamery had a profit of $528.70.
Mitchell’s stay was brief and he moved on to establish creameries in Adin and Alturas. In 1900, the Susanville Creamery created problems with a competitor. By the fall of 1901, the creamery decided to fold and sold its equipment to the Spoon Brothers & Christie.