Michigan dairy farmers are getting a 510 million-dollar boost. Two new dairy processing facilities are scheduled to be built in St. Johns, north of Lansing. The plants are expected to create more than 250 new jobs.
“This is a tremendous win for the dairy farmers in our state, for all of Michigan,” said Governor Rick Snyder, who is a fan of Michigan’s cows.
“We have the second most productive cows in the entire nation, second only to Colorado and they’re not even close in terms of number of cows,” Snyder said. “So, we have the best cows in the country.”
The idea is to give Michigan a local place for milk, instead of having to haul it out of state.
John Wilson of Dairy Farmers of America said this will help Michigan dairy farmers – who have been hit hard recently with a milk surplus and uncertainty on the trade front.
“This plant’s ganna soak up eight million pounds of milk a day, and that’s a big deal for dairy farmers in the state of Michigan,” he said.
The money comes from private investors – supported by more than 20 million dollars in grants and tax abatements from the state. Those are in the final stages of being approved. Construction for the facilities is expected to start in September and be finished by December 2020.
A $510 million milk-processing complex will be constructed in Michigan, creating nearly 300 jobs and bolstering a dairy industry among the largest in the U.S. that has been suffering because of low prices and high costs, state officials said Thursday.
The facility in St. Johns, about 20 miles (30 kilometers) north of Lansing, will include one plant that will process 8 million pounds (3.6 million kilograms) of milk daily into cheese and whey protein powder and another that will use byproducts from the milk operation to make whey products for human consumption and animal feed.
"Michigan's dairy industry is an essential economic driver in our state, and this new investment elevates and expands our potential to rise even higher while bringing new jobs and opportunities to this region," Gov. Rick Snyder said.
State agencies are working on tax breaks, grants and other incentives, although they still need approval of various boards. The Michigan Strategic Fund on Thursday recommended designating the site as an Agricultural Processing Renaissance Zone, which will provide $26.1 million in tax relief over 15 years. The state Administrative Board is expected to decide whether to approve the proposal in September.
The project is "vital to the success of the Michigan dairy sector," said Jeff Mason, CEO of the Michigan Economic Development Corporation, the state's primary business support office.
Michigan has more than 1,700 dairy farms and ranks fifth among milk-producing states but has too little processing plant capacity. That requires farmers to ship their product elsewhere, adding to their expenses. Meanwhile, an oversupply of milk is driving down prices.
The double whammy caused farmers to lose more than $164 million in 2017. Some have even dumped their milk rather than sending it out of state at a loss, said Kathy Achtenberg, spokeswoman for the economic development corporation.
"It's been very difficult to watch so many hardworking people struggle unnecessarily," said Gordon Wenk, director of the Michigan Department of Agriculture and Rural Development.
Milk processed at the 146-acre (590,000-sq. meter) complex will come from Dairy Farmers of America and Select Milk Producers. Both are cooperatives that joined with the global nutrition group Glanbia plc to form Spartan Michigan LLC, which will develop the $425 million dairy processing plant. The Michigan Milk Producers Association also will send milk there. Glanbia will oversee commercial, technical and business operations.
Proliant Dairy, an Ankeny, Iowa-based company that manufactures products from dairy ingredients, will invest about $85 million in an adjacent byproduct facility.
Construction is scheduled to begin in September and be completed by December 2020.
"Michigan is ripe for growth with a surplus of quality milk, so there's tremendous opportunity to not only benefit the dairy farm families in this area, but also the local economy and region," said Greg Wickham, CEO of Dairy Farmers of America.