GORHAM – As dairy farmers struggle to beat the odds and survive financially, some are looking to find new sources of income by turning out products such as compost, cheese and heating pellets.

Eddie and Becki Benson’s farm in Gorham is converting manure produced by their 150 Holsteins into black gold by mixing it with shellfish waste and other organic matter to make a compost they call Surf ‘n Turf. They sell the rich organic matter in bulk to nurseries and vegetable farmers.

Smiling Hill Farm in Westbrook, which already bottles and retails its own milk, has teamed up with an artisanal cheese maker to create Silvery Moon Creamery, a cheese-making business.

The Barker Farm in Leeds is working on a plan to turn feed corn and other forage crops into pellets that can be burned as heating fuel.

Each of three farms recently received a $15,000 Federal State Market Improvement grant to help create the new sources of income. The awards come in addition to $25,000 grants the farms received in 2004 to explore more ways to market their products, said Stephanie Gilbert, a farm specialist with the Maine Department of Agriculture.

Low milk prices and development pressures that drive up land values and taxes have been blamed for a steep decline in the number of dairy farmers in Maine. The total has dropped from 5,100 in 1945 to 358 last year, according to Stan Millay, executive director of the Maine Milk Commission, which oversees the industry in the state.

At their 500-acre farm in Gorham, the Bensons use heavy machinery to mix and compost mounds of manure, dead leaves, shellfish waste and other organic matter.

The couple began accepting and composting the shellfish waste about seven years ago at the request of the Maine Department of Environmental Protection, which was looking for a way to dispose of it. Adding Maine crustacean waste has helped in marketing the product.

“For some reason, people have a romantic interest in shellfish compost,” Eddie Benson said.

Composting accounts for about 20 percent of the farm’s income, he said, but dairy farming remains his passion.

“The whole compost business, I do that, so I can do this,” Benson said.

While the Bensons may have found a successful formula, diversification won’t solve the problem of the vanishing Maine dairy farm, Millay said.

“They can’t all be Smiling Hill,” he said. “It’s a good way for some people, depending on how they’re set up, but it’s not going to work for everyone.”