US dairy producers join forces to boost Michigan dairy industry

07-Jun-2016 - Last updated on 09-Jun-2016 at 09:54 GMT

DFA, Foremost Farms, and Michigan Milk Producers believe it's the right time for investment in Michigan dairy.

The Dairy Farmers of America (DFA), Foremost Farms USA and Michigan Milk Producers Association are exploring joint ownership of a cheese processing plant in the state of Michigan.

All three organizations have dairy farmers in the state and are looking to enhance Michigan’s position in the domestic and global dairy market place.

Michigan, the next dairy state?

The decision to join forces is largely driven by the growing milk supply in Michigan, a state that is strategically positioned to serve US and global markets because of its access to major transportation infrastructure.

“Michigan is an area that is ripe for growth and ideally located to meet the consumer demands,” DFA senior vice president and chief of staff Monica Massey told Dairy Reporter. “When you have a surplus of milk and demand for ingredients, that is an area you should be taking seriously.”

The jointly-owned plant is expected to process 6m pounds of milk a day and make 220m pounds of American-style cheese annually.

Three parties, one goal

According to Foremost Farms president Michael Doyle, leveraging each of the three dairy organizations' strengths and weaknesses is the key to expanding Michigan’s dairy industry.

“We’re competitors in the same space. We compete in the marketplace but we all have the same vested interest,” Doyle told DairyReporter. “It shows basically what we’re doing is that we’re not creating individual solutions, we’re sharing the risk and the rewards.”

Doyle says Foremost Farms is seeing a rise in US cheese consumption in addition to global demand for whey ingredients.

“We sell about 550m pounds of cheese per year, 270m pounds of specialty whey and that gets split and fractioned out. We need to grow both sides of this,” Doyle said.

Timeline for expansion

While a completion date for the cheese plant expansion has not been released, Doyle says the project will get going soon and that they have “specific dedicated teams” working on the joint venture.

DFA also recently announced its plan to invest in a 33m-square-foot cheese plant in Cass City, Michigan, which is in line with the dairy producer’s overall strategic plan to create supply chain efficiencies and increase commercial investments to bring increased value to the cooperative’s farmer-owners.