By KEVIN WALKER

Michigan Correspondent

ST. JOHNS, Mich. — Michigan officials have announced a new dairy processing plant that could help area dairy farmers in these times of thin profit margins.

The project, announced August 9 by the Michigan Economic Development Corp. (MEDC), is a $425 million, 146-acre dairy processing facility that will be dedicated to cheese production. A second, smaller plant at the same location will process whey.

The larger plant will create 259 new jobs and the smaller project will create 58 positions, said Heather McCann, a spokeswoman for Dairy Farmers of America (DFA).

Glanbia, a global nutrition company based in Ireland, has partnered with Select Milk Producers and DFA on the larger project. The new entity will be called Spartan Michigan LLC. The cheese-making plant will process more than 8 million pounds of milk per day. Glanbia is putting up about half the cost of the new plant, with the rest divided between Select and DFA, McCann said.

Proliant Dairy Michigan is investing up to $85 million in the whey plant. Construction for both facilities is expected to begin in September and will be finished by the end of 2020, officials said.

This project did get incentives from the MEDC and Michigan Department of Agriculture and Rural Development (MDARD), according to Peter Anastor, director of MDARD's agricultural development division. Taxpayers have put up $27.6 million to help with the project.

In addition, the Michigan Department of Transportation plans to help the companies with free road work in the area to coincide with the new construction. Local taxpayers are helping the project by providing property tax abatements; this is in the form of a Renaissance Zone, which will lower the plant's tax rate.

This project, in addition to the Foremost Farms dairy plant project in Greenville and the recently completed dairy expansion in Constantine, are bound to help dairy farmers in the state deal with an oversupply of milk, according to Anastor.

“Our role here at MDARD is really to help food and agricultural businesses grow,” he said. “One of the things we did was identify dairy as a growth opportunity for Michigan, mainly because there's an oversupply of milk produced here. A problem is that a lot of it has to be driven out of state. That's a real challenge to some of our farmers.”

According to published reports, a lot of the extra milk that can't be used inside the state is being driven to Wisconsin and undercutting farmers there. The problem of milk oversupply is a nationwide problem, McCann explained.

“As a nation, we are out of balance with supply and demand,” she said. “There's more milk than we know what to do with because our farmers are so efficient. Milk producers are producing more milk than we've ever seen before.”

A plant near a dairy farmer helps with transportation costs, but the new plant in St. Johns will be dedicated to cheese production, a value-added product. That, along with the whey – a byproduct of the cheese-making process – will create more profit for farmers as well, McCann said.

“I think the whole state is excited about this,” Anastor added. “We're certainly excited here at MDARD. This is going to be one of the largest dairy processing plants in the country.”