Agribusiness  September 12, 2011

Leprino choice pleases region’s dairies

GREELEY – Weld County dairy farmer Mike Faulkner couldn’t have been happier to hear that Leprino Foods Co. would be coming to Greeley.

“I was, of course, extremely pleased,´ said Faulkner, a second-generation dairy farmer who milks about 2,800 cows near Galeton. “Leprino is a company that Dairy Farmers of America has worked with in other locations and they’re an A-1 organization.

“We need a place for Northern Colorado milk to go because we’re bursting at the seams,” he said. “We’re shipping a lot of milk out of state and that’ll save a lot on shipping costs.”

The Denver-based cheese-maker’s announcement in mid-June that it had chosen Greeley over Garden City, Kan., as the site of its newest production facility sent ripples of satisfaction throughout the Weld County dairy community and elsewhere, with up to 500 new jobs expected at full build-out of the plant.

The 400,000-square-foot facility will be built on the east side of downtown Greeley on the site of the former Western Sugar Cooperative plant. The operation, which will supply mozzarella to such national clients as Pizza Hut and Domino’s, is expected to be fully operational by 2012.

The facility will also produce whey protein products for use in making yogurt, baby formula, baked goods and animal feeds.

The region’s dairy producers are the biggest beneficiaries of Leprino’s decision, according to Les Hardesty, owner of Cozy Cow Dairy in Windsor and chair of the National Dairy Board. Hardesty noted that a big portion of locally produced milk is currently being trucked out of the region to Denver and other processing sites.

Having a local processor will likely mean more dairies and the expansion of existing dairies in the region, he said.

“If dairies expand, they need more feed, more trucks, more supplies,” Hardesty said. “It’s just a huge ripple, trickle-down effect not just for our organization but for business throughout Northern Colorado. It’s great news for the dairy industry, great for Greeley and great for Weld County.”

Thriving dairies

Mike Reidy, Leprino Foods vice president, said the company’s decision to choose Greeley was based in part on a thriving Northern Colorado dairy industry.

“This is truly a new plant to deal with growth requirements in our business,” he said. “When it first opens we’ll be processing 4 million pounds of milk a day and 7 million when we’re at full capacity.”

That translates to 80 50,000-pound truckloads of milk coming to the processing plant each day when it first opens and ultimately up to 140 trucks per day.

Greg Yando, chief operations officer for the western region of the 18,000-member Dairy Farmers of America cooperative, said local DFA dairies will get first shot at selling milk to Leprino through its contract with the company.

“Our first priority is we have a tremendous obligation to supply milk to Leprino and our Colorado members will get first crack at it,” he said. “First and foremost will be our existing membership within about a 40- to 50-mile radius of Greeley.”

Yando said there are about 140 DFA dairies in Colorado with most in Weld County. He said Weld County currently supplies about 53.8 percent of the DFA-produced milk in Colorado, followed by 23.4 percent in Morgan County and 7.6 percent in Larimer County.

Leprino’s Reidy said the DFA’s recommendation to choose Greeley over Garden City was crucial. “They played a big part,” he said. “Their input into the process and projection of milk growth is a critical part of our decision-making.”

Yando said recommending Colorado over Kansas was based on several factors, including Colorado’s cooler climate. “When it gets hot and humid, (cows) get very uncomfortable,” he said.

But there was also a quality-of-life issue for Leprino employees that Colorado held over Kansas, he noted. “In Northern Colorado you have amenities and a quality of life that people are looking for in where they work as well as where they live,” he said, adding that extends to dairy farmers as well. “Dairy farmers are not only looking for the right components for their cows but they want a quality in their personal life, too.”

Farms eye expansions

The imminent arrival of Leprino will no doubt fuel interest in new dairies coming to the area, as they did when a Leprino cheese production facility was built near Fort Morgan in 1995, and the expansion of existing dairies.

Both Hardesty and Faulkner said they are taking a wait-and-see approach as to whether they will seek to expand their operations.

“We have a permit to milk more cows, but it will depend on the price of milk and other things at the time (it opens),” Faulkner said. “I do anticipate there will be quite a bit of growth to support that plant.”

Greg Bell, a banker with New Frontier Bank – which has a large dairy loan portfolio – said he’s already seeing some interest from dairy operators who might want to increase their herds. “We’re looking at two expansion plans and I think we’re just headed into it. It takes about a year to get cows up to production level.

“We’re already pushing the deadline on getting ready for that plant.”

Bell said there are about 80,000 dairy cows in the region now and that an additional 70,000 are probably needed to satisfy the demand of the new Leprino plant. Part of that demand likely will be met by some new dairies to the area, he noted.

“I do think we’ll see some dairies relocating to the area,” he said. “To the best of my knowledge, there are 10 dairies exploring the area right now – one from Ohio and the rest from California.”

GREELEY – Weld County dairy farmer Mike Faulkner couldn’t have been happier to hear that Leprino Foods Co. would be coming to Greeley.

“I was, of course, extremely pleased,´ said Faulkner, a second-generation dairy farmer who milks about 2,800 cows near Galeton. “Leprino is a company that Dairy Farmers of America has worked with in other locations and they’re an A-1 organization.

“We need a place for Northern Colorado milk to go because we’re bursting at the seams,” he said. “We’re shipping a lot of milk out of state and that’ll save a lot on shipping costs.”

The Denver-based cheese-maker’s announcement in mid-June…

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