News / Blog

New Dairy processing plant beneficial to Vermont dairy farmers
May 17, 2018

The prospect of a new dairy processing plant in Windham County is good news for dairy farmers around Vermont, said Diane Bothfeld, the director of administrative services and dairy policy for the Vermont Agency of Agriculture, Food and Markets.

“When a new processor comes online, there is less powdered milk, which means more money for farmers,” she said. “It’s very positive to have another processor in Vermont.”

Bothfeld explained that what milk is used for determines what a dairy farmer receives in compensation. Liquid milk gets the best return on the dollar for farmers, she said, followed by yogurt and ice cream, cheese and, finally, butter and dried milk.

“If more milk goes to yogurt and less to powder, that will help improve the farmers’ weighted average price,” said Bothfeld.

According to documents filed with the Vermont Secretary of State’s Office, Thomas Moffitt, the former president of Commonwealth Dairy, is a principal in a $32.5 million push to rehabilitate a factory recently vacated by a defense contractor in the Exit One Industrial Park in Brattleboro. According to documents presented to the Brattleboro Select Board, the new dairy facility — Culture Made Vermont LLC — would produce “value-added” products from milk supplied by Vermont dairy farms. A value-added dairy product includes cheeses, yogurt, ice cream and butter.

“We are encouraged that the owners have chosen Vermont,” said Anson Tebbetts, the secretary of the Vermont Agency of Agriculture, Food and Markets, during a “listening tour” stop in Brattleboro on Tuesday. “One reason they have decided to locate here is, we can offer them a quality milk product for production. They know Vermont farmers produce high-quality milk, which can be turned into high-quality products.”

Moffitt co-founded Commonwealth Dairy in Brattleboro in 2010 with Ben Johnson. Shortly after, the pair partnered up with Ehr-mann USA Holding, a subsidiary of German dairy company Ehrmann AG. The 38,000-square-foot facility on Omega Drive opened a year later, and expanded its local factory in 2013.

Also in 2013, Commonwealth opened a plant in Casa Grande, Arizona, which employs 100. The company’s product distribution reaches from coast to coast and Commonwealth also ships to the Caribbean and South America.

In 2016, Commonwealth announced a $20 million investment projected to increase its workforce to a total of 200 employees. According to the Brattleboro Planning Department, that expansion is still in the works. Last year, Moffitt left Commonwealth Dairy, telling the Reformer he had accomplished all he had set out to accomplish.

It is unclear what products Moffitt hopes to produce in the proposed facility.

“Anytime we can have a new local purchaser, that’s a good thing, regardless of whether it’s purchased directly from any given farmer or not.” said Leon Corse, of the Corse Farm and Dairy in Whitingham, who attended Tebbett’s listening tour stop at Winston Prouty Center for Child and Family Development.

Vermont is part of the federal Northeast Marketing Region that encompasses New England, New York, Pennsylvania, New Jersey, Maryland and Delaware. At the end of each month, farmers in the region receive a federal order that announces the weighted average blended price for all the uses of milk.

“They find out what the price is a month after they’ve shipped their milk,” said Bothfeld. “You can do a lot of tracking, deciphering and predicting, but it’s not easy.”

Tebbetts said if dairy farmers know they can depend on another purchaser, it can help even out the ups and downs of the market.

“There is an over-supply, so we need new value-added businesses,” he said. “We need new products to take some of that pressure off. Even though the new facility will be located in Windham County, it’s going to benefit farmers around the state.”

The over-supply means small dairy farms around the state have been closing up shop. A small, certified dairy farm is classified as one with between 50 and 199 cows, Bothfeld said.

Despite the loss of dairy farms in the Green Mountain State, those remaining have grown as far as the number of cows is concerned, said Bothfeld, from an average of 133 cows per farm in 2010 to 169 cows in 2017.

“The number of farms in Vermont have declined overtime, but the quantity of milk has not,” said Bothfeld. “Farmers are very good at what they do, managing their farms and animals to be as productive as possible.”

Vermont dairy farms produce 2.7 billion pounds of milk a year.

Understanding how important the dairy industry is to Vermont, the state continues to explore ways to keep dairy farming sustainable. According to a study funded by the Vermont Dairy Promotion Council, the Vermont dairy industry brings $2.2 billion in economic activity to the state each year.

Included in the budget recently approved by the Vermont Legislature is assistance to farmers to help them pay for participation in the federal Margin Protection Program for Dairy, a voluntary risk management program for dairy producers that offers price protection when the difference between the all-milk price and the average feed cost falls below a certain dollar amount selected by the producer.

However, noted Bothfeld, the governor has indicated he will veto the budget.

“The budget isn’t final, but this assistance has been agreed to by all the parties involved,” she said.

Also in the budget is funding for the Vermont Economic Development Authority’s Agricultural Credit Corporation Program, which offers low-interest loans to farmers to cover the costs for, among other things, seeds and fuel in the spring.

The University of Vermont, through its Extension Services, offers business management resources for farmers to help them streamline their operations. Those resources include best management practices in accounting and bookkeeping and how to best prepare to hand over farming operations to a family member.

 

Source: Reformer



CURRENT ISSUE

Spring 2018