Dairymen, other processors eager to sell to new plant
By CAROL RYAN DUMAS
TWIN FALLS, Idaho -- Dairymen say a yogurt plant that broke ground here Dec. 19 will provide another outlet for their milk.
The Chobani Greek yogurt plant will use an estimated 3 million pounds of milk a day, producing 18 million 6-ounce cups per week, said Nicki Briggs, Chobani's director of communications.
Brent Olmstead, executive director of Idaho Milk Producers Association, said the plant will benefit the local dairy industry and the community.
"We have the milk, so it's nice to have another outlet," he said.
Chobani's decision to locate in the Magic Valley speaks well for long-term efforts to bolster the dairy industry, he said.
"We've said for years there's room for more processing here," he said.
It's unclear how the plant will impact local milk prices or supplies.
Jerome Cheese recently announced it would increase its cheese-yield price. Jon Davis, COO of Davisco, Jerome Cheese's parent company, said the increase was due to a reallocation of money already being paid for milk, not a reaction to competition.
Davis is "excited as heck" that Chobani is coming in, as it will give Jerome Cheese an opportunity to sell Chobani whey protein, an ingredient in yogurt, he said.
Jeff Williams, president and CEO of cheese and whey manufacturer Glanbia Foods, said his company is rethinking its pricing because of the Jerome Cheese announcement. Chobani's milk needs represent a 6 percent increase in production, something he said Idaho dairymen should easily be able to handle.
"Milk will be a little tight at first ... hopefully, dairymen will respond and produce more milk," he said.
Rick Naerebout of Western Dairy Business Solutions and manager of Independent Milk Producers, said the yogurt plant offers potentially higher prices to dairymen because it will be selling a value-added product, as opposed to bulk commodity cheese.
"It's a game changer. It's going to raise the bar for everybody, just more competition," said Mike Roth, IDA president and co-owner of Si-Ellen dairy, Jerome.
The facility will pull up the average milk price among processors who pay under the Class III price and will give other processing companies the confidence to locate in Idaho, he said.
IDA has already had inquiries from companies considering expanding into Idaho because of Chobani's decision, said Bob Naerebout, IDA executive director.
If Chobani is successful in getting the milk and employees it needs, it could attract other processors to the state, Williams said.
Those who courted Chobani, from the governor's office to Twin Falls Urban Renewal and local government, deserve a lot of credit, Bob Naerebout said.
Chobani plans to have the plant operational in 2012. The New York company is continually growing and expansions to the Twin Falls plant are expected.
"By no means will this be the be-all, end-all facility," Briggs said.
Chobani's Twin Falls plant
Initial investment: $1.28 million
Economic incentives: $31.5 million
Needs: 3 million pounds of milk per day
Space: 200 acres
Parent company: Agro Farma
CEO and founder: Hamdi Ulukaya
Headquarters: South Edmeston, N.Y.