$20M Boise investment designed to solidify market, maximize products' value
By CAROL RYAN DUMAS
Darigold will expand production capacity at its Boise plant next year, said Michelle Carter, communications coordinator for Northwest Dairy Association.
The project is a $20 million capital investment that will expand production capacity by 33 million pounds per year. It will also expand the plant's wastewater treatment facility and create an additional 30 jobs at the plant.
The Boise plant produces fluid milk, ultra-pasteurized products and soy beverages. The project is expected to be completed in spring 2010.
In these tough times in the dairy industry, expansion would seem an unlikely move.
"Our core purpose is to provide a secure market for our owners' milk while maximizing its value," Carter said. "The Boise expansion will increase capacity for the manufacture of higher-value Class II products."
Initially, the company has enough milk within its system to meet the new capacity, Carter said.
"However, Darigold, like many other dairy manufacturers, (is) experiencing a decreased milk supply due to the economic hardship that dairy producers across the nation are facing," she added.
That economic crunch is an area Darigold has addressed with its producer-retention program. The program helps Northwest Dairy Association members with cash-flow needs and creates a financial incentive for members to stay in business to preserve and grow the member milk supply.
"The program was designed to protect, grow the co-op milk supply and also inject a much-needed cash flow to those members who are participating in the growth of that milk supply," Carter said.
Program payments totaled $13 million and were distributed to current members in two payments. The first payment, made in June, totaled $7 million, about $1.09 per hundredweight.
The second payment was originally planned to be distributed at the end of September, but due to the economic distress of its members, the association elected to move the distribution date up to July. The second payment distributed an additional $6 million to members and equaled about 99 cents a hundredweight.
"Although other co-ops have created similar programs, no one has come close in providing the financial value and incentives that NDA/Darigold has provided for its members," Carter said. "This is consistent with the company's core purpose of providing a secure market for our owner's milk while maximizing its value."
Darigold has a total of 11 processing plants across the Pacific Northwest.
Staff writer Carol Ryan Dumas is based in Twin Falls. E-mail: email@example.com.