Michigan Spartan LLC: Major ‘Processing Campus’ to be built in Michigan

A News Digest about Michigan’s $510 Million Processing Complex: DFA, Glanbia, Select Milk, and Proliant are Partners

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On Thursday, August 9, 2018, Michigan announced a monumental project which will fill part of the void in worldwide dairy processing capacity.
Michigan Spartan LLC is the business entity developing a ‘world class dairy processing facility’  expected to process over 8 million pounds of milk a day when fully operating, said to be by September of 2020.  American Cheese is projected to be a primary product, with whey permeates, a by-product of cheese production used for food and feed applications, also a product offering.
The new facility is a partnership between Dairy Farmers of America (DFA),  Glanbia, Select Milk Producers, and Proliant Dairy Ingredients.  The venture is said to be similar to Southwest Cheese, a previously existing partnership of DFA, Glanbia, and Select Milk.
Michigan Milk Producers will also be a milk source for the facility.
The evolution of the project included a number of local and regional economic development and government agencies, with the Michigan Economic Development Corporation’s Michigan Strategic Fund board an integral player.  The Michigan Department of Agriculture was also involved.
The sheer magnitude of all the agencies and efforts involved in this monumental project offers many lessons to others considering dairy development efforts in any location.
The project is multi-national in scope, and involves worldwide dairy industry heavyweights.   Dairy Farmers of America is North America’s 2nd largest cooperative and 8th largest dairy company.  Select Milk Producers is North America’s 8th largest dairy cooperative according to Progressive Dairy, (6th largest on USDA’s Top 100 Ag Co-ops – last available, 2016 numbers) and 14th largest co-op on that composite  ranking.  Glanbia Nutritionals is North America’s 22nd largest dairy company, and a subsidiary of Glanbia PLC, based in Kilkenny Ireland. Proliant is based in Ankeny, Iowa.

Following is a digest compiled from media reports of today’s (August 9, 2018) from Michigan and other areas:

From the Detroit News:  “We really try to grow the value of the agriculture industry so that most of the commodities stay here in the state, have them processed here, keep the farmers here,” is a statement from  MEDC CEO Jeff Mason. The project is slated to receive $26.5 Million in Tax Abatements over 15 years. 

From the Lansing State Journal (makes one marvel at the effort put into project):  the project involved a number of state and local government agencies, included tax concessions on several levels, with these project parameters:
  • 146 acres in the site
  • Will process about 8 Million pounds of milk a day (mostly American style)
  • Will produce about 300 million pounds of cheese per year
  • Will operate  24/7, 365 days per year
  • Notes similarities to Southwest Cheese in New Mexico [another Glanbia / DFA / Select Milk joint venture]
  • Will use by-products from each layer of processing (whey from cheesemaking, then permeate from whey concentrated for dairy solids)
  • 259 jobs at the cheese plant
  • 38 jobs at the adjacent whey permeate plant

From Crain’s Detroit Business;  a business publication in the area:

  • Another $40 Million in Tax Incentives likely to come in the future may drive total investment from $510 to $550 Million
  • The project is part of Michigan’s Agriculture Processing Renaissance Zone initative, a program which assisted with another $58 million dairy processing facility (Foremost Cooperative) and a soybean processing facility earlier this year
  • “Adding this capacity to our ecosystem . . . is really going to bring stability to the market” – Peter Anastor, Division Director, Michigan Department of Agriculture

From The Charlotte Observer (an AP story)

  • Glanbia will oversee commercial, tecnical, and business operations
  • The project considered other sites in other locations

 

A worldwide milkshed suffering from a lack of modernized processing capacity should benefit from this project.

Note: Additional links and updates may be added in the future to this blog post.

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Dean Foods to close 7 plants in 2018; No additional producer letters expected soon

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(NOTE:  This is an evolving story affecting Dean Plants across the country.  Sources are a variety of public information and anonymous sources.  Updates will be made as warranted).

Dean Foods will be closing 7 processing plants in seven states in the next months, with the plants located in Kentucky, Georgia, Pennsylvania, Massachusetts, Illinois, Michigan and Minnesota.

News of the plant closings began to emerge through local news outlets in some of the cities involved through the day Tuesday, May 22nd, yet, at this posting, there are yet no official statements from Dean Foods corporate officials.

This announcement follows the jolting announcement in early March that over 100 farmers in 8 states, marketing milk as Dean Dairy Direct (independent producers, meaning not members of a co-op or marketing agency) producers, would have their contracts terminated as of May 31, 2018.  At this point, many of those farmers have found new markets, several elected to disperse their herds, with several still struggling to find a market and income source for their farm’s milk.

The navigation of stormy, wind-tossed oceans of milk in the overflowing worldwide dairy milkshed has led to the announcement that these processing plants will be shutting their doors during the late summer and fall.   Intense competition to find a processing market/plant for milk, exacerbated by declining milk consumption the world over, has converged in a perfect storm of farmers getting caught in the crosshairs with no markets for their milk, along with employees in processing plants losing their jobs as well.

Competition for the prime retail real estate of grocery store shelf space is also a factor in these events.

In the southeast, the two Dean Foods plant closures at Braselton, GA and Louisville, KY follow the early May announcement of the closure of a Fulton, Ky plant, owned by Prairie Farms.  In that event, processing operations will cease, but the facility will remain a distribution center, with 12 of 52 employees remaining.

An anonymous Dean Foods source says that “no more farmer/producer contract terminations via letters from Dean Foods are expected in the near future.”  However, we all know that increasing consumption of fluid milk is the quickest way to stabilize the future of all dairy farms across America.

The Dean plants said to be closed are:

  1. (News report: not initially confirmed by Deans)
  2. (News report: Member of founding family not bitter) 
  3. News report:  (Processes gallons & half-gallons, 120 employees)
  • Braselton, GA [Mayfield brand]   (2015 Dean’s CEO Quality Award Recipient)    (Visitors Center closed in 2014, reopened, Over 1 million folks a year to learn) (Reports from anonymous employees who received notices)
  • Louisville, KY    [Dean’s brand] News report link to WKYT) “That loss will cut production at the company’s Louisville plant, which will shut down.”

This announcement is only one in a series of cost-cutting measures Dean Foods has taken over the past several years.  A PET milk plant in Richmond, VA was closed in the fall of 2017.   In a Food Business News report of March 1, 2018, phrases such as “increasing competition,’ ‘6% decline in volume,’ and ‘reset cost structure,’  were signals more changes are to come.

The Louisville plant closure comes as no surprise, due to its distribution overlap into Indiana of retail centers to be served from the new Walmart milk processing plant opening in Fort Wayne, IN.  However, the opening of that Walmart plant has now been pushed to late summer, for a variety of reasons.  A recent report by Sherry Bunting, which appeared in the Farmers Exchange, features an interview with a Walmart spokesperson on that project’s status.

The closure of the Braselton, GA, Mayfield plant, may have come as a bit of surprise to some folks.  In 2016, this display in the Visitor’s Center relayed some stats which were current at that time, however, today’s employee count is closer to 150.  It is not known if this includes distribution networks.

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Dean Foods, as of an annual Dairy Foods (magazine) report, last published in the August 2017 edition, is the United States second largest milk processor, with Nestle being #1.

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As is common with any company treading in difficult waters, reports of a sale of the company, or of a merger and acquisition, are commonplace.  Sometimes they prove to be nothing, sometimes they prove to be true, and only time will tell which is the case with Dean’s.  It truly will be in the best interest of the United States dairy industry for the company to stabilize, due to the number of farms for which it provides a market, and for the number of employees in plants across the country.

The hardest truth of all of this is that ultimately, farmers in local regions, the rural economies that depend on a viable market for those farmers, and employees at plants, are the ones suffering the most from battles at all levels of the worldwide milkshed. 

Updates, and corrections if needed, will occur as more news becomes available.

 

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A Milkshed of a TN Dogwood Winter

We’re back!

After a hiatus that was longer than it was meant to be; Milksheds Blog is back up and running. This post isn’t going to be real complicated –  just a quick reminder of what a milkshed is – courtesy of a cup of hot chocolate!

Today, in East Tennessee, despite sunny skies, we woke up to a rather chilly morning in our ‘Dogwood Winter’  – freeze and frost warnings were a forecaster’s Sunday morning hymn!

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And after church, there was still a chilly undertone, and a cup of hot chocolate was the perfect answer to warming my bones.

My general definition of a milkshed is “all of the elements that come together to bring any glass of milk or other dairy product from the cow to the consumer.”    The picture below is a ‘snapshot’ of almost everything in the economic chain that came together in that one very delicious cup of hot chocolate.

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In this area, Dean Foods has a big footprint, and the ag community is so glad to have them in East Tennessee and North Georgia, bottling under the national Dean brands of DairyPure and TruMoo, the beloved regional brand name of Mayfield, and several private labels for regional grocery chains and big box retailers.   The direct jobs at the processing plants in the Athens, TN and Braselton, GA communities are important to economic developers in each of those townships.

And the pride that is found regionally in that Mayfield brand and those plants can’t be measured!

But not often considered is the much wider impact those milk plants have as they drive the farming industry in this geographic corridor.  There are hundreds of dairy farms and thousands of cows that have a purpose and are sustained because of those milk plants.  And extended from that, hundred of row crop and hay farmers grow grains and hay that get milled into feed for those dairy herds. Even farmers outside the area benefit, because commodities find their way to feed mills in the area to get blended into TMRs for  those cows.  At some point, maybe some numbers can be put to that, sequence of farm economic events, but that will wait for another day.

I would be remiss if I didn’t mention there are several other milk plants within a 150 mile radius that utilize ‘local’ milk, but we’ll discuss them on a future day.  Today, DairyPure was in my fridge, and thus in my hot chocolate.

As for the hot chocolate mix – I bought it because of the ‘milk bottle’ container originally, but wow, is it great!  It is made by Burnham & Mills in Vermont – if you’d like to order, try clicking on their name.

Milk is white, and looks simple.  But a milkshed can be far more complicated.  We’ll explore more – after I finish that cup of hot chocolate mix!  These chilly days won’t last long!  Until next time – drink a few gallons of milk in your milkshed!

France to the French Broad – A Uniform’s Milkshed

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A soldier’s World War I uniform is a visible reminder of many elements of today’s milkshed. This uniform teaches us how actions taken, although seemingly small and minute at the time, can have a long-term and life-lasting influence many years later.

In this case, the gentleman who wore this uniform nearly 100 years ago had an impact on your modern global foodshed, in several different  ways.  His name was John Graham, and he was my great-uncle.

Uncle John left his family’s Jefferson County, Tennessee farm to enlist in the Army in The Great War.  As common with so many young men of his day, his calling was not forced due to a draft; it was simply a point of honor,  and a belief that America had the duty being the world’s leader in defending democracy, and it was his responsibility to help that mission.

He served in the European Theatre, and returned  back to East Tennessee at war’s end. We know he was a corporal, but ‘remembrances’ have him at a higher rank.   Hopefully, some of the paperwork and verification will show up in a long-lost box in the top of a closet sometime in the future.

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A bit longer than a decade after he returned home, Uncle John’s family found themselves experiencing the government mandate of ’eminent domain,’ when TVA began bringing dams to the Southeast and East Tennessee, both for flood control and in the name of jobs as the country struggled out of the Big Depression. The family was forced to move from Jefferson County by the Douglas Dam project, to a new home farm on the Little Tennessee River, in Loudon County, not far from the juncture with the (Big) Tennessee River.  That move occurred early in 1936.

As the family re-established itself with a diverse family farm (dairy cows, registered Holsteins, sheep, hogs, tobacco), my Uncle John was also building a real-estate career and working on the farm part-time.  His focus was on farm sales.

I was delighted –  and astonished – to find out recently that some friends of mine who operate a Polk County, TN river-bottom farm came to those life-generating, fertile soils courtesy of my Uncle John bringing them to that site. Their large dairy herd produces over 4200 gallons of milk a day – that’s a year’s worth of milk for 40 average families in a day’s time!

In the mid-60’s, Uncle John found himself, once again, in the middle of a Graham family relocation due to a TVA dam.  This time, the Tellico Dam project, again using eminent domain, came knocking and was telling my immediate family, with my dad at the helm, that we had to find a new farm.  Uncle John, with his real estate contacts, was instrumental in locating farms across the Southeast for my dad to look at (if you’re running a dairy, you don’t have much time to look yourself).   When he thought he found something that might work, our weekends were spent loading up and driving to check out what might be our ‘new home.’

This ‘looking’ went on for about 3 and 1/2 years before we finally moved to a new farm home.  The  process involved options on a river-bottom farm in Sequatchie County, TN, a row-crop farm near Guthrie, KY, neither of which materialized) and many, many dairy farms across Middle and East Tennessee.  Finally an unexpected death of a farm owner who remembered my Uncle John and Dad, and a widow’s desire to not have anything to do with milking cows, led to a somewhat sudden purchase of a farm that had been the very first one my family looked at.
 
Uncle John made the trip with my dad to sign the first documents of purchase, and may have even co-signed the loan (again, a missing file lost in a box would verify that, or not). 
 
This river-bottom farm near Newport, Tennessee lays in the foothills of the Great Smoky Mountains, 20 miles from the NC border.  Through many hundreds of years, it has been home to Indians who grew maize (the predecessor of today’s corn, settlers, the Robinson family, the Myers family, and was owned by Mr. Sluder before the Grahams purchased it.  The last time cows were milked here was the late 1970’s, after I went to college, but it has played a huge role in the Southeast milkshed because grains grown here have gone into feed for dairy cows.
 
The river bottoms are bordered by the French Broad River, which some geologists recognize as the third oldest river in America, and one of the oldest in the world.  I can’t help but be amazed by the changes in the world that, “If this river could talk,” we would learn about.
 
My generation of Grahams is only a speck in time of the stewards that have witnessed changes in agriculture and in the world.  I hope we are up to the challenges that face us in a future of agriculture as we struggle to feed the world, and balance that struggle with the function of a family.
 
If only Uncle John, with his wisdom and perspective that were enhanced by a uniform of honor, were around today to give us some advice on farming, foothills, river bottoms and a family farm!  All of these elements affect the future of your worldwide milkshed.  Indeed, all of these elements affect the future of your worldwide foodshed!