Two new world-class dairy processing facilities are expected to dramatically improve the production, profitability and long-term prospects for Michigan’s struggling dairy farmers. In 2017, depressed milk prices caused milk producers in the state to lose $164 million as a result of an oversupply of milk and high transportation costs due to the current lack of milk processing facilities in the state.
Glanbia PLC, a global nutrition group with a presence in 32 countries, has partnered with Select Milk Producers Inc. and Dairy Farmers of America (DFA) to form Spartan Michigan LLC, which will develop a $425 million, 146-acre dairy processing facility in St. Johns, Mich. The new facility will process more than 8 million lb. of milk per day and is expected to create 259 new jobs.
Proliant Dairy Michigan is investing up to $85 million in an adjoining facility, which will manufacture whey permeate products and employ 30-38 new workers.
Construction for both facilities is expected to begin in September and be completed by December 2020.
“This project is vital to the success of the Michigan dairy sector,” said Jeff Mason, chief executive officer of Michigan Economic Development Corp., the state’s chief business development and attraction arm that administers programs and performs due diligence on behalf of the Michigan Strategic Fund.
“Michigan’s dairy producers — already among the most efficient in the world — will now be even more competitive and prepared for the market challenges ahead,” he said.
Michigan Department of Agriculture & Rural Development (MDARD) director Gordon Wenk said the announcement was “tremendous news” for the state’s struggling dairy farmers.
“Almost every dairy farm in Michigan is family owned. It’s been very difficult to watch so many hard-working people struggle unnecessarily,” he said. “MDARD is proud to be a part of this project, and I’m grateful for all the incredible work our agricultural development and dairy teams did to help make this happen.”
The two dairy cooperatives — DFA and Select Milk Producers — will supply milk to the processing plant, ensuring that Michigan dairy farmers have a dedicated home for their milk. While not an investor in the new plant, the Michigan Milk Producers Assn. is also expected to supply milk to the plant.
“Michigan is ripe for growth with a surplus of quality milk, so there’s tremendous opportunity to not only benefit the dairy farm families in this area but also the local economy and region,” DFA chief financial officer Greg Wickham said.
Rance Miles, CFO and chief operating officer of Select Milk, said, “We’re pleased to continue our investment in Michigan’s dairy industry. Our long and successful relationship with our partners and the support of local and state agencies are keys to building this world-class dairy facility.”
The adjoining facility operated by Proliant will use byproducts from the milk processing facility to make whey permeate products for both human and animal consumption. Having a complementary facility located on the same campus will virtually eliminate the cost of transporting byproducts to another state for processing.
“Proliant Dairy looks forward to expanding our business to central Michigan and developing a productive, long-term relationship with Glanbia, DFA and Select,” said Mike Matter, Proliant Dairy president and CEO. “We appreciate the support from the state and local teams to make this project successful.”
Michigan Gov. Rick Snyder told attendees at an event announcing the plants, “Michigan’s dairy industry is an essential economic driver in our state, and this new investment elevates and expands our potential to rise even higher while bringing new jobs and opportunities to this region.”
He added, “I thank Glanbia, Select Milk Producers, Dairy Farmers of America and Proliant for choosing to invest in Michigan and look forward to watching our state’s dairy industry continue to grow and thrive long into the future.”
When completed, the mid-Michigan site will be among the largest dairy processing facilities in the country. Glanbia will oversee commercial, technical and business operations to produce cheese and whey products at the campus.
“The support of local and state agencies demonstrates why Michigan is such a great location to invest,” Glanbia Nutritionals CEO Brian Phelan said. “We are looking forward to getting up and running with our partners and farmers providing world-class dairy products while bringing jobs and economic development to the area.”
The watershed project is supported by an estimated $27.6 million in grants and tax abatements from the Michigan Strategic Fund, MDARD and the Michigan Department of Transportation.