U.S. Milk Powder Processors Adding 440 Million Pounds of Additional Capacity
U.S milk powder processors are adding significant processing capacity in the next two years, which could produce an estimated 440 million pounds of various milk powder types once completed. This equates to roughly 6 billion lb. of additional milk processing capacity.
“While this expansion may appear to be ill-timed in the current market environment, the longer-term outlook paints a much different picture,” says Ben Laine, a senior dairy economist with CoBank. “In the the long run, emerging markets and a growing world population will enable U.S. dairy producers and processors to expand, especially if our powder industry competitively positions itself.”
Six new plants are expected in California, Kansas, Texas and Washington, with Darigold, Hilmar Cheese, Lonestar/Hoogwegt, Valley Milk, Dairy Farmers of America (DFA) and Select Milk Producers all making significant investments in new processing capacity. (Note: Darigold, DFA and Cayuga have added plants in 2013 and 2014.) These plants will likely be able to produce skim milk powder, whole milk powder and non-fat dry milk, the kind of versatility needed to compete in the global market, says Laine.
“Dairy processors will need to be able to respond to shifts in the dynamics of component values and manufacture the most economically favorable product mix at the time,” says Laine.
View Laine's YouTube comments here.