A new day dawns for Colorado dairy producers with Leprino’s need for more milk come November.
The state needs 60,000 more dairy cows to supply Leprino’s new cheese plant.
Got cows? Colorado needs them. The Centennial State is poised to boost its standing among milk-producing states with the construction of Leprino Foods’ new cheese plant, 60 miles northeast of Denver.
The $270 million plant, in Greeley, Colo., will begin operating in November 2011. By the time it kicks into full gear in late 2013, it will require 7.5 million pounds of milk daily. State dairy sources say that means Colorado will need 40,000 to 60,000 additional cows to meet the demand.
“Everything is on schedule for our November 2011 startup,” says Nick Opper, vice president of production operations at Leprino’s Greeley plant.
Phase 1 operations will require 1.5 million pounds of milk a day, Opper says. That will quintuple when the plant reaches full capacity by late 2013.
Those requirements will push Colorado’s milk production needs to about 14 million pounds a day. The state’s 120 dairy producers already produce 6.6 million pounds of milk daily from 122,000 cows. That supplies Colorado’s 12 milk-processing plants already in operation.
Denver-based Leprino is the nation’s largest producer of mozzarella cheese and related whey and lactose products. The Greeley facility will become the state’s second cheese plant; Leprino also operates one in nearby Fort Morgan. Dairy Farmers of America (DFA), which counts most Colorado dairies among its membership, will supply all milk for the new facility.
“Colorado will be one of the most concentrated areas for cheese production in the U.S., with the potential for 1.1 million pounds of mozzarella at full capacity,” predicts Bill Wailes, department head of animal sciences at Colorado State University.
“The new Leprino plant is very good for our industry,” says Chris Kraft, who dairies about 40 miles from the Greeley plant. “Any time you have a market in your own backyard, that’s excellent.”
Kraft has already expanded his dairy operations in anticipation of Leprino’s growing milk needs. In 2006, the Fort Morgan producer built a new dairy next to his existing one, increasing his milking string from 1,500 to 5,000 cows.
But local producers, most of whom are concentrated in northeast Colorado, aren’t likely to supply the entire milk production.
“Half of the increased production will come from within and half from new ownership,” Wailes says. “Some of the new operations will be in areas where we’ve not had dairies before.”
Doubling Colorado’s daily milk production is a big task, but it’s necessary and doable, says Wade Meek, member services manager for DFA’s Mountain Area Council. “Colorado has producers who are very growth-minded, with a desire to milk more cows,” he says. “This plant will help them fulfill that desire.
“In 2008, we were shipping as many as 40 loads of milk out of state every day,” Meek adds. “What this new plant provides is a local market for those loads and an opportunity for additional expansion for producers.”
DFA is also working to recruit dairies to eastern Colorado, offering help with financial services and input procurement and connecting producers with local experts for advice on site selection, permitting and water questions. “We are going to be there to help navigate those challenges,” Meek says.
Terry Dye knows what it’s like to relocate to Colorado. He moved his dairy operation from New York 25 years ago.
“Colorado is a great place to dairy,” says Dye, who milks 1,450 cows near Fort Collins. “Water and feed are not issues in the slightest. We grow a tremendous amount of corn here.”
Although Dye believes the influx of additional cows and dairies will increase competition for feed and silage, he’s all for Colorado’s dairy expansion. “A bigger industry is a better industry,” he says.
COLORADO SITING SPECIFICS
What will newcomers to Colorado’s dairy industry find?
- The dairy permitting process in farm-friendly Colorado is easier and shorter than California’s but not as expedited as in West Texas. “We’ve been through it, and site selection is important to get it done smoothly,” says dairy producer Chris Kraft. Even so, he adds, “it’s not going to be cheap to build a dairy in Colorado.”
- Feed should be plentiful, since the state not only grows feed but also imports much hay from Nebraska, Wyoming and Kansas.
- The recent cost of production for Colorado dairies ranges from $13.50 per cwt. to $16 per cwt.
- Colorado has enough water, but it won’t be cheap or easy to get. “Water is gold in Colorado,” Kraft says. Major water sources include runoff from the Rocky Mountain snowpack, the Ogallala and other underground aquifers, and the South and North Platte Rivers. But competition for that water among urban rural and recreational users is intensifying.
- While irrigated farmland can cost a hefty $3,000 to $6,000 per acre in northeast Colorado, milk hauling and transportation costs can be competitive.
- Colorado’s climate can be extreme. Most of the state’s dairies lie on the plains east of the Rockies. Temperatures can change very quickly, especially in winter. “If a storm comes, it can drop to 10° below zero,” Kraft says. “We don’t get blizzards very often, but when we do, they’re tough.” Summer temperatures can soar to 110°F.
- Colorado has the nation’s second-highest per-cow production, 23,000 lb. per year. “We have very good farmers who’ve learned you’ve got to stay on top of things,” Kraft says. “When the weather turns nasty, you’d better be there. Dairy farmers in Colorado know that and keep their eyes open.”
- Getting enough employees could be difficult because of tightened immigration enforcement, but that’s common to most U.S. dairies. “It’s a difficult, thorny issue,” Kraft says. “It’s definitely going to be an issue for new dairies, but I have to think these will be producers who understand the situation.”
- January 2011