We find ourselves in the middle of one of the greatest wealth transfer periods of all time. Those with wealth must decide whether they want to make transfers, and if they do, they must decide how much, to whom, when and in what structure?
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Dairy Farmers of America, the dairy marketing cooperative, is now supplying Leprino’s new Greeley plant with about 1.5 million pounds of milk a day.
It has agreed to supply 4.5 million pounds by the end of 2013 as the plant builds out, Wade Meek, DFA’s Colorado member services director, said.
But, ultimately, the plant is expected to drink up 7 million pounds of milk a day.
Will local dairy farmers be able to meet that demand?
“That is the million-dollar question,” Meek said.
The answer lies in a combination of current producers as well as new farms coming in.
“We’re very optimistic,” Meek said.
“It is an undertaking, but it is possible,” dairyman Les Hardesty, owner of Painted Prairie farm in Weld County, said.
Hardesty, chairman of the Mountain Area Council of Dairy Farmers of America, has about 700 cows and has no immediate plans for expansion.
Others, however, are definitely thinking about growth.
“We have several dairies that have found ground and made offers. They’re starting to move dirt and build the dairies,” Meek said.
Currently Colorado is milking around 120,000 cows. Dairy farmers would have to add another 40,000 to 60,000 cows to meet the new demand, if not more.
There are huge challenges
One is the availability and cost of feed. “Dairies are going clear to Montana to get hay,” Charles Tucker, a dairy farmer milking about 350 cows, said. “There is going to be a lot of competition” for feed sources.
Water is not always readily available. “We do have a big water issue,” Tucker said.
Equipment and transportation costs continually increase. Of course, land is not cheap. And immigration issues could cause labor shortages on dairy farms, farmers say.
Given these various challenges, “a lot of these big dairies are in survival mode,” Tucker said. He plans only a “gradual expansion” on his farm, he said.
Hardesty, however, called the Leprino expansion “an opportunity for dairy farmers.”
One new farmer that might take advantage of that opportunity is Hardesty’s own daughter. Marci Hardesty, 23, just opened her new dairy farm with 40 cows.
Denver-based Leprino is the largest maker of mozzarella cheese in the world. The Greeley plant will make non-fat dry milk, dairy ingredients and cheese.
“Our exports in general have more than doubled in the last two years and we are building the Greeley facility to help meet that demand,” Ted Wietecha, spokesman for privately-held Leprino Foods, said.
The Greeley plant now employs about 100 full-time workers and that will jump to 500 when the $250 million plant completes its expansion, Wietecha said. The plant will grow from 130,000 square feet to more than 500,000.