Plan for dry-milk facility heartens dairymen

A proposed dehydrated milk processing facility in Fallon could increase the size of dairy herds in Churchill County and give regional dairymen some much-needed financial security.

The processing facility proposed by Dairy Farmers of America for the New River Business Park in Fallon would cost upwards of $85 million and would employ between 40 to 50 fulltime workers, says Eric Grimes, executive director of the Churchill Economic Development Authority.

Headquartered in Kansas City, Mo., Dairy Farmers of America is a cooperative of 16,000 dairy operators nationwide. It owns 27 dairy-products plants.

The plant would give relief to Churchill County dairymen who have been pressured by volatile milk prices and face a further pinch from a California initiative that discourages the sale within the Golden State of milk produced in neighboring states.

The plant would provide a nearby place for Fallon dairymen to process their milk and alleviate the concerns over the "Real California Milk" campaign that has left Nevada dairymen with fewer options for bottling liquid milk.

"It is huge for Fallon, and it will have an economic impact on the entire region," Grimes says. "The herd sizes for Northern Nevada dairymen are going to double in size."

Currently, Churchill County dairymen ship most of their milk to the Golden State for bottling. But that could change if more California bottlers subscribe to the voluntary initiative to only sell milk from California-raised cows.

Bill Christoph, co-owner of Liberty Jersey Farm with his brother-in-law, Alex Vanderstoel, says that if one large client - say Raley's, for instance - demanded California-only milk, Nevada dairymen would find themselves at a troubling crossroads.

"That would be a huge loss for us," Christoph says. "They are a primary customer in California. The number of bottlers that will accept Nevada milk already has been reduced, and that places us in a more precarious position."

A local processing facility could bring stability and security to Northern Nevada dairies.

Churchill County currently has 18 operating dairies, says Grimes. Three dairies - including some large producers - closed due to the recession and low milk prices that eroded profits and years of hard-fought equity. Dairymen also would save significantly on transportation costs with a nearby processing facility. They are paid a set price for delivery of their milk, regardless of how far it travels. Additionally, says Newell Mills of Mills Jerseys, dairymen wouldn't have to fret over severe winter weather in the Sierra that often curtails shipments.

One recent winter, Newell says, several Fallon dairymen were forced to dump loads of milk because trucks couldn't get over the Sierra and back to the farms to pick up fresh milk.

"The cows, they keep producing, and some people sustained great losses (that year) because their tanks weren't big enough to hold all the milk," Mills says.

Fallon dairymen might be paid less for milk processed at the new facility because dry milk prices are slightly lower per hundredweight than liquid prices, but Liberty Jersey Farm will take that tradeoff.

"It is a very secure market, and that is a huge benefit for us," Christoph says. "A plant like this is as dependent on a local supply as the local supply is dependent on the plant - it is a real marriage."

Christoph says the dehydrated milk produced at the plant will primarily be exported to countries that lack adequate refrigeration for liquid milk. The dehydration process will be slightly different than most U.S. facilities, he says, and the end result is a power that can be reconstituted with water into a quality milk drink unlike the powdered milk found on American store shelves.

"Combined with water, it is a reasonable equivalent to what you get in the store. It comes as close as you can to being an instant milk."

Herd sizes could increase, too, since the plant would be designed to accommodate greater volumes of milk than is currently produced by Churchill County dairies.

"This gives our industry the possibility of a future," Christoph says. "Given the exposure that we have had as an industry and being subjected to the political situation in California, everybody is reluctant to make an invest in this industry. We could be put out of business if something should happen in the California market, and insulating ourselves from that situation frees us up and gives us the potential for a future."