Despite increase in local production, new producers sought
By CAROL RYAN DUMAS
Dairy Farmers of America will soon begin building a plant to produce whole milk powder in Fallon, Nev.
At full capacity, the plant will process 2 million pounds of milk per day. It will produce about 250,000 pounds of whole milk powder daily and 90 million pounds annually.
A groundbreaking event is set for next week with construction on the $85 million facility to begin in May. The plant's completion is scheduled for summer 2013.
"It gives us a secure home for our milk that we've not really had for a long time," said Pete Olsen, a Fallon dairyman and a DFA director and member of its Western Council.
The nearest destination for north Nevada milk is the Model Dairy bottling plant in Reno. Much of the milk produced in the Fallon area is trucked to California, he said.
The 22 dairies in the Fallon area produce about 1.25 million pounds of milk a day. The new plant will require another million pounds or so. Existing producers have indicated they will expand their operations to produce about 20 to 25 percent of that increase, but new producers will be needed to meet the full demand, he said.
DFA's plan is to have a dedicated milk supply for the plant. That will benefit Nevada producers and could also benefit California producers in the first few years while Nevada is building its herds.
It will also create new opportunities for California milk when Nevada stops shipping there, he said.
The Fallon plant will be the first of its kind in the Western hemisphere and is part of DFA's plan to strengthen its position in world markets, Olsen said.
Whole milk powder is the milk powder of choice in international markets, he said.
The Bain Report is showing the trend in whole milk powder is viable and there's opportunity in the market, he said.
"New Zealand is converting to whole milk powder plants as rapidly as possible," he said.
DFA has not released the cost of building the plant, but the costs will be shared between DFA corporate and the Western Council, Olsen said.
The plant will create at least 40 full-time positions and increased job opportunities in the community, according to DFA.
DFA hopes to attract new producers to Nevada, noting the state's ample water and conducive climate, low feed costs with plentiful dairy-grade alfalfa hay, ag-friendly regulations, favorable tax structure and incentives.