GREENVILLE — The strategy for a Wisconsin-based milk processor that’s in talks to create a potential “dairy campus” in Greenville, Mich. is quite simple: Follow the milk.
Foremost Farms USA purchased a vacant, 96-acre site in Greenville on Nov. 9 for $1.15 million where the farmer-owned cooperative aims to launch a dairy processing plant in the next 12 to 14 months to serve members across the state.
The proposed capacity comes at a time when the supply of milk has far surpassed local processing capacity, driving up costs for farmers who have had to pay to send their milk out-of-state, according to industry experts.
For Foremost Farms, the location of the proposed plant makes sense given the local supply base.
“It’s as simple as we are following the milk,” said Laura Mihm, corporate communications manager of Foremost Farms. “Milk production is very strong in Michigan, and Greenville is about (30 miles) to the west of our epicenter of milk. That’s the reason we chose it.”
The facility expects to receive about 6 million pounds of raw milk per day, according to Mihm, who noted the company initially would use separators to process milk solids.
That’s roughly equal the amount of raw milk processed daily at the Continental Dairy Facilities LLC plant in Coopersville.
“We are in the middle of members’ milk,” Mihm said. “The thought is that we are going to work with other cooperatives to grow that (Greenville) location. This is our first step in harvesting that milk capacity.”
Mihm didn’t disclose the number of jobs the plant may create. The company is currently working with state and local officials “to ensure a safe project” and to secure unspecified corporate incentives to support the investment.
According to a statement, the company’s investment is “contingent upon receiving approvals of necessary local and state incentives and support.”
Foremost Farms generates annual sales of approximately $1.5 billion; the cooperative includes 1,400 dairy farmers throughout the Midwest.
Talk of a new dairy processing plant surfaced in January of this year when Foremost Farms was said to be part of a broader project involving the Michigan Milk Producers, Dairy Farmers of America and Glanbia plc, a global food processor based in Ireland that wanted to locate a cheese-processing facility somewhere in the state. At the time, MiBiz reported the partners planned to process 9 million pounds of raw milk daily.
It’s unclear whether Glanbia is involved with the recently announced Foremost Farms plans in Greenville.
Still, the new milk processing facility could certainly benefit Michigan dairy farmers, who’ve had to incur higher transportation costs in recent years as an oversupply of raw milk has surpassed the in-state capacity, as MiBiz reported in April.
Michigan has about 1,800 dairy farms, of which 97 percent are family-owned, according to a report from the Okemos-based United Dairy Industry of Michigan.
Still, for Michigan farmers, the Greenville plant will not offer a “quick fix,” Mihm said.
“Michigan, as you know, is a fast-growing region in milk production … (but) there is no one magic solution,” she said. “(The facility) will help with transportation costs and market milk properly.”
However, Ken Nobis, president of the Lansing-based Michigan Milk Producers Association, told MiBiz that the initial response from industry executives to Foremost Farms’ announcement has been positive.
“We need more processing capacity in the state of Michigan,” Nobis said. “Anything that happens in the state will help the industry. … It would definitely lessen transportation costs to have a processing facility in the state of Michigan — just the fact that you will get added processing on the surface is good.”
Mike McCracken, owner of Carson City-based Harvey’s Milling Co. Inc., a feed supplier to dairy farmers, believes the proposed processing plant would be a boon for his company.
“I hope this goes through,” McCracken said. “There are tremendous amounts of families to take care of. This is going to definitely help.”
McCracken has been in the industry for 49 years, supplying ingredients to dairy farmers and working as a consultant, where his role was to help farmers look “into the future for long-term sustainability,” McCracken said.
With Foremost Farms, he envisions “a win-win situation” for farmers and processors.
“This dairy industry is big business, big dollars,” McCracken said. “We do have a glut of milk that this could relieve if this could come to fruition. This means more revenue streams for my dairy producers. We are looking at a domestic market. If this continues to grow, this could transpire into a greater global market.”
