Dairy Farmers of America (DFA) and Arla Foods announced this morning they were partnering on building a small cheddar cheese plant in western New York.
The plant, which will take in approximately 150 million pounds of milk annually, will be supplied by eight DFA member farmers. Construction of the $58 million facility will begin this fall and production is expected to start in the fall of 2017. The plant will process roughly 400,000 lb. of milk daily.
DFA will own 70% of the plant and Arla, 20%. The remaining 10% ownership share will be held by the eight farmers who supply milk to the plant.
“We are pleased to be entering into this partnership with Arla,” says Rick Smith, DFA president and CEO. “Arla and DFA share the same passion for providing the highest quality products to consumers and are committed to sourcing these products from dairy farmers who employ sustainable and transparent farm practices.”
Since the U.S. market has a restricted import quota for cheddar, Arla has limited ability to import European cheese into the country. “Adding cheddar to our U.S. portfolio will make us more attractive to the retailers and help increase the sales of our European products made from [our] owner milk,” says Peder Tuborgh, Arla Foods CEO.
Arla is owned by 12,700 farmers in Denmark, Sweden, the United Kingdom, Germany, Belgium, Luxemburg and the Netherlands. DFA is the largest U.S. dairy cooperative with more than 14,000 members on nearly 9,000 farms.