ST. JOHNS — A major new dairy processing plant in Mid-Michigan aims to help alleviate a key challenge for the state’s dairy farmers.
Spartan Michigan LLC, a joint venture of Ireland-based Glanbia plc, Select Milk Producers Inc. and the Dairy Farmers of America, plans to develop a $425 million, 146-acre processing facility in St. Johns that will process more than 8 million pounds of milk per day.
The firm expects construction on the 360,000-square-foot facility to be completed by December 2020. The investment could create up to 259 new jobs, according to executives.
The new investment could help reduce shipping costs and address oversupply concerns for Michigan producers, Jeff Mason, the CEO of the Michigan Economic Development Corp., told reporters this morning.
“We’ve been working with our partners at (the Michigan Department of Agriculture and Rural Development) to try to grow the value-add side of the agricultural industry to keep more of the commodities here in the state — to have them process and create more value for not only our farmers but the economy here in the state of Michigan,” Mason said. “Today’s project does exactly that.”
The state will create a new agricultural processing renaissance zone for the Spartan Michigan project. The zone will also benefit Proliant Dairy Michigan, which plans to invest up to $85 million to build an adjoining 85,000-square-foot facility. Proliant aims to produce an estimated 400,000 pounds daily of permeate solids, a byproduct of milk processing.
The Ankeny, Iowa-based dairy manufacturer could employ up to 38 new workers at the plant, according to a memo from the MEDC.
Jeremy Webb, a senior business development project manager at the MEDC, said the tax abatements for the renaissance zone will be worth roughly $26.1 million over a 15-year period.
The new plant will be supplied by dairy cooperatives Dairy Farmers of America and Select Milk Producers, “ensuring Michigan dairy farmers have a dedicated home for their milk,” according to a statement.
Mason said the firms “are all coming together for what will be half a billion dollars of investment in St. Johns” and “creating one of the two largest dairy processing facilities in North America.”
The St. Johns facility would share the same partnership group as the nation’s largest dairy processing facility is in Clovis, N.M., according to Peter Anastor, director of MDARD’s agricultural development division.
Anastor described Michigan as one of the most “efficient milk producers in the world,” which is leading to new investments in processing capacity. He cited a new Foremost Dairy processing facility in Greenville as another example of the renewed investment in the sector that will help farmers better deal with transportation costs and cut down on an oversupply of milk.
MDARD will decide later this year whether to give roughly $1 million in grants to support the Glanbia and Proliant projects.
In an MiBiz story earlier this year, experts warned that a glut of milk on the market and the resulting low prices would cause dairy farmers to go out of business.
“From a consumer standpoint, you have to understand that when prices go up slightly on the farm, there should be very little impact from a retail standpoint,” Ernie Birchmeier, livestock and dairy specialist for the Lansing-based Michigan Farm Bureau, said at the time. “Dairy farmers not only in Michigan but across the country have been experiencing record-low prices compared to production costs over the last several years.”