Dairy growth plateaus after Leprino surge
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GREELEY — Weld County’s dairy industry surged in the past decade, with numerous expansions to serve demand from Leprino Foods Co.’s new mozzarella-cheese manufacturing plant in Greeley.
But as Leprino’s facility enters its 11th year of operation, there are signs that the era of massive dairy expansions in Weld County might be ending.
Denver-based Leprino opened its Greeley plant in late 2011 on the former site of the Great Western Sugar Co. factory, with expansions eventually taking the facility to 795,000 square feet and more than 500 employees.
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Today, Leprino’s Greeley operation processes 8 million pounds of milk per day — or more than 930,000 gallons, which equates to the milk from 146,000 cows, according to data that Leprino supplied to BizWest.
Colorado ranks 13th nationwide in terms of milk production, with much of that production in Weld County. The state has about 120 dairy farms, with more than half of them in Weld County.
Data from the National Agricultural Statistics Service, part of the U.S. Department of Agriculture, show the number of milk cows in Weld more than doubling from 2010 to 2021, to 125,000 head. Neighboring Morgan County showed a 65% increase.
But don’t expect that rate of growth to continue, said Tom Haren, CEO of AgProfessionals LLC, a Greeley-based agricultural-development company that has worked on most of the region’s dairy expansions.
Haren said the region’s dairy expansion has been “all attributable” to Leprino.
“We’ve pretty much filled that need,” he said. “Without another market here, a new cheese plant or a new ‘something,’ there will be no new growth here in Colorado until another market appears.”
Dairies must have customers for the milk that’s produced, and high prices for Northern Colorado water make further expansions unlikely, he said, especially when states such as Texas, South Dakota or Idaho have far lower costs.
“There’s a lot cheaper places to dairy than here,” Haren said.
Leprino, for example, recently announced plans for an $870 million production facility in East Lubbock, Texas, encompassing 850,000 square feet and expected to employ 600 workers.
“With our land and water prices on top of the fact that there’s not a new market here, new dairy development and expansion is nil and will be for the foreseeable future,” Haren said.
“I wouldn’t say that we’ve hit the ceiling,” he added. “There’s still land, and I can still find a spot to put a dairy and get it permitted and built. But the market factors are, where are they going to sell their milk?’”
A spokesperson for Dairy Farmers of America, a national milk cooperative, agreed that exponential growth of Weld County’s dairy industry has likely come to an end.
“The dairy industry has had an opportunity to grow in this area because there was a lot of demand for that milk here locally,” said the spokesperson, who asked to remain unidentified. “With no continued or no growth or demand identified, I think we’ve hit somewhat of a plateau without any demand showing itself.”
Dairies remain big business
Statewide, dairies produce more than 5 billion pounds of milk annually, according to the Colorado Department of Agriculture. That supports 53,000 direct and indirect jobs, and more than $3 billion in economic activity.
Dairy growth in Weld County has “been dramatic and certainly tied to the Leprino expansions,” said Rich Werner, CEO of Upstate Colorado, a regional economic-development organization. “When we measured it in the past, the economic impact has been in the billions [of dollars].”
“Behind beef, it’s probably the largest contributing sector of the ag community,” Werner said.
He added that innovation, including robotic dairy equipment and streamlining of processes and operations, will help the industry become more efficient.
Longs Peak Dairy LLC in Pierce and Marrs Milky Way Dairy in Ault are two examples of dairies that have embraced robotic technologies.
Dairies also are becoming more environmentally friendly, developing alternative technologies for methane capture, onsite biodigesters and solar.
“You’re seeing all of these adaptive energy resources coming in to help supplement the bottom line,” Werner noted.
But the price of water poses a significant challenge for dairies, Haren said. Lactating cows consume about 30 gallons of water per head per day, with additional water used for cleaning, irrigation and other needs.
Some of that water is reused four or five times, Haren noted, but the demand remains high, helping to drive up water prices in a region that also is experiencing rapid population growth.
“The urban growth, along with the ag growth, is going to stretch the availability of water,” he said.
Such issues make it unlikely that large new dairy operations will launch in the area, at least without a ready market. Milk produced locally would have to be shipped elsewhere, with high fuel costs making it uneconomical.
“We can put wheels under it and haul it back east, but any time you’re putting wheels under basically a load of water, it costs a lot of money,” Haren said, with the potential for dairies to “end up making nothing on the milk.”
GREELEY — Weld County’s dairy industry surged in the past decade, with numerous expansions to serve demand from Leprino Foods Co.’s new mozzarella-cheese manufacturing plant in Greeley.
But as Leprino’s facility enters its 11th year of operation, there are signs that the era of massive dairy expansions in Weld County might be ending.
Denver-based Leprino opened its Greeley plant in late 2011 on the former site of the Great Western Sugar Co. factory, with expansions eventually taking the facility to 795,000 square feet and more than 500 employees.
Today, Leprino’s Greeley operation processes 8 million pounds of milk per day — or…
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