UPDATE: JV between Glanbia, dairy co-ops scheduled to be operational in October 2020 | Michigan Farm News

UPDATE: JV between Glanbia, dairy co-ops scheduled to be operational in October 2020

Category: Livestock

by Mitch Galloway | Farm News Media

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ST. JOHNS — For Michigan dairy farmers, October 2020 can’t come soon enough.

That’s when a new Clinton County dairy processing facility currently under construction will be able to start processing 8 million pounds of milk on a daily basis into cheese.

A lot of cheese — 300 million pounds annually.

In addition to providing hundreds of jobs, John Murphy of Glanbia Nutritionals, the manufacturing arm of Glanbia plc (OTC: GLAPF), says the St. Johns plant will consume nearly 20 percent of Michigan’s current milk production.

“It’s a very, very big plant,” Murphy said Tuesday to local Rotarians in St. Johns. “. …This will have an immediate economic impact.”

The economic impact is not just for farmers who need a “home for their milk” but also the economy of mid-Michigan, which could see roughly 600 temporary and 250 full-time jobs stemming from this project.

The processing complex — modeled after the Southwest Cheese Company LLC plant in Clovis, N.M. — is a joint-venture between the Ireland-based Glanbia plc, the Dallas-based Select Milk Producers Inc. and the Kansas City-based milk marketing cooperative Dairy Farmers of America.

According to Murphy, Glanbia’s plant is on schedule and set to “take milk” by October of 2020. When complete, the project, called Spartan Michigan LLC, will house a 375,000-square-foot manufacturing and warehouse facility, a wastewater treatment plant, and an adjoining 85,000-square-foot protein processing plant, owned and operated by the Iowa-based Proliant Dairy Ingredients.

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“This will provide some much-needed relief to the dairy processing needs in Michigan and an economic boost to the St. Johns and the surrounding region,” said Ernie Birchmeier, livestock and dairy specialist for the Michigan Farm Bureau. “The partnership that has been created between Glanbia, Dairy Farmers of America and Select should help to provide some long-term stability to plant operations and the dairy farmers. Economically, it will be great for the region.

“Any time that you can add a significant number of jobs and investment in an area, there is a multiplier effect that is very positive for the surrounding communities.”

When broken down, Murphy said the cheese and whey plants will cost roughly $450 million, the wastewater treatment plant about $25 million and the adjacent Proliant Dairy Ingredients’ permeate plant “my guess at $125 million.”

Murphy said the roughly $600 million investment project consists of three different projects.

“So the milk comes in, we make the cheese (and) the cheese goes out one way,” he said. “When you make the cheese, you have a solid stream, which is the cheese, and then you have a liquid stream, which is the whey.”

Murphy said Glanbia will further process the whey by-product into two product streams — milk permeate and concentrated whey powder. The milk permeate — a high-lactose dairy ingredient — will be transported via pipeline to the Proliant plant for final processing into permeate powder and sold as a dairy ingredient.

“What we are doing here is taking milk in and are separating it from its various parts and then packaging it off and selling it,” he said. “Most of our product goes to other people who take it and do something with it.”

According to Murphy, the processing plant is more “automated than anything else we’ve had,” which is why the company is looking for more “technically-proficient” employees.

It’s also why he said the company plans to pay “above the going wage because we want to stay out of the unions.”

In the modeled-after Clovis, N.M. plant, 14 million pounds of milk is processed every day.

“We build, own and operate the processing facility, and Dairy Farmers of America and Select Services, which are two (dairy) co-ops, actually supply the milk,” Murphy said. “They are farmers who band together and deliver the milk to our doorstep, where we take it and process it. That’s the unique nature of the (joint venture) partnership. It worked out very, very well with Southwest Cheese.

“That plant was built at 7 million pounds per day in 2004, and in 2017, they were at twice what their original production was,” Murphy added. “We should kind of see the same path here. There’s no reason not to — considering the milk growth that’s been in the area.”

Glanbia produces American-style cheddar cheese and whey protein. The company generated about $2.7 billion in revenue in 2018. Some of the company’s end-users of cheese include the Kraft Heinz Co., Land O’ Lakes Inc., and Sargento Foods Inc.