The economic impact of a new dairy milk ingredient processing plant to Northern Nevada — and especially to Churchill County — will strongly be felt for future years, said both local officials and dairy representatives who formally toured the facility along with the media Tuesday morning.
The Dairy Farmers of America, a leading dairy cooperative owned by nearly 9,000 member farms, operates 33 manufacturing plants in the United States. An open house for the community is planned for September for the 110,000-square-foot, $84-million facility. Big D Contractor from Utah served as the general contractor for the project.
Fallon Mayor Ken Tedford Jr. said the Dairy Farmers of America plant, which will send dry milk products primarily to China, fits in with the area’s agricultural base.
“This is a shot in the arm for agriculture,” Tedford said during a question and answer session after media representatives and dignitaries toured the multi-million dollar, state-of-the-art facility.
Since the Great Recession struck Nevada in 2008, Tedford said the local area has taken a big hit to the economy. With several businesses opening in the former Walmart building and now with the opening of the DFA plant, Tedford said the economy is improving.
“With DFA providing 40-45 jobs with good pay, the jobs are solid and in line with what we do in agriculture,” he said, adding that three other businesses aligned with the DFA plant have also opened in Churchill County.
Tom Haren, CEO of AGRO Professionals — a firm that works to attract new milk producers to the area, said the rule of thumb shows the gain of 100 cows adds one employee and two to three indirect employees to the area’s workforce.
Haren, whose firm is based out of Greeley, Colo., said the economic indicator process he sees is a 3:3.5 multiplier that adds money to the economy.
Tedford said state economic forecasters have reported the DFA facility, once it is fully operational, could generate as many as 11,000 jobs throughout Northern Nevada.
Glenn Wallace, chief operating officer for the Ingredients Global Dairy Products Group, added 19 dairies throughout Northern Nevada will continue to contribute to the plant’s growth.
Despite drought-like conditions, two local dairymen see very little impact because of the low supply of water.
“Drought is a fact of life,” said Pete Olsen, a local dairyman who is also a county commissioner and DFA board member.
Olsen said the conditions are not as bad as they were in 1992, and farmers and ranchers were able to persevere.
“We have the most reliable sources of water in Northern Nevada,” Olsen said, referring to two rivers, Lake Tahoe and Lahontan Reservoir.
Alan Perazzo, whose dairy operation in Stillwater will expand to 1,600 head, doesn’t seem phased by the drought.
“Water is an issue during drought years, but it’s in the way you manage it,” he pointed out. “We’re planting different crops (for feed).”
The Perazzo family began their operations in the early 1970s with 80 cows and expanded several times to 500 cows. With the DFA facility now online, the Perazzos will be adding more cows.
“Before the plant was announced, we never had the opportunity to increase (their dairy herd),” he said. “There was never an avenue to think about expansion. This plant has been a blessing.”
Jay Waldvogel, senior vice president for Strategy and Global Development, explained how the idea for the Fallon plant originated. The process began when DFA identified additional consumers wanting to use more dairy products. He said the explosive growth in emerging markets, especially China, led DFA to identify the need for dry milk and then develop plans to build a plant to satisfy that need.
Consequently, after conducting research and talking to DFA members, the board of directors determined Fallon would be an ideal location to build a plant to convert raw milk to dry powder.
“We’re producing nutrition for the people around the world,” Waldvogel said.
Wes Clark, facility manager since April 2012, said two groups toured the facility to see the various operation stages. Except for one area, no photography was allowed because of industrial security concerns.
Once the dry milk is bagged and stacked on pallets, Clark said each 56-bag pallet is tagged so it can be tracked. After a minimum 10-day waiting period at Fallon, he said the bags of dry milk — each weighing 55 pounds — then wait for transport to the Port of Oakland (Calif.) prior to sale.
The automated system stacks each pallet and tightly wraps the bags together with plastic.
Clark explained the plant is operational 13-14 hours a day, seven days a week. One day of month is scheduled for routine maintenance. Clark said each day the plant produces 2 million pounds of raw milk into 250,000 pounds of powder once the water is removed. Additionally, the extracted water is stored in two huge 70,000-gallon tanks and treated for other purposes.
“We try to use zero city water,” Clark said.
The facility manager said hygiene is very important to plant operation. Employees — including those who took Tuesday’s tour — must wear protective clothing, hairnets and either special rubber boots or shoe coverings once inside the milk processing area. Also, he said tests are continually performed on the milk to check for levels and quality. That becomes a daunting task when as many as 32 tankers bring milk to the Fallon plant.
As each group entered a special area, Clark pointed out that the excessive space was added to allow for expansion.
“This project is new for DFA, and we needed to build a plant correctly to have a good product,” he said.