Posted by: FBRuralDevelopment | 06/06/2014

USDA grant helps Wyoming dairy farmers study costs, benefits of a milk processing plant

By Erin Anthony, Editor of Farm Bureau News, American Farm Bureau Federation

Scott-George-NCBA-7

Scott George on George Farms in Cody, WY

Faced with having to ship their milk a far-too-costly 500 miles to be processed and bottled, the Cody, Wyoming-based George family is looking closely at the advantages and drawbacks of building and operating their own milk processing plant. With the help of a value-added producer grant from USDA, the family is evaluating local markets for demand, forecasting financial prospects, looking at quality control and plant design, as well as considering whether it would be more feasible for the farm to market its own milk products or contract with a major distributor, like a nationwide or regional grocery store chain.

In the business for six decades, the George family raises 600 dairy cows, 100 commercial beef cows and grows crops on 2,000 acres of irrigated farmland. With no milk or cheese processing plants in Wyoming, the Georges typically ship their milk 90 miles to Billings, Montana, where it’s processed, bottled and sold in both states. However, when the Montana facility is at capacity, the Georges have to send their milk an additional 410 miles to Colorado.

“These transportation costs will break the operation,” said Scott George, co-owner of George Farms.

As part of the feasibility study, members of the family toured a number of producer-owned plants in Wisconsin that are similar to what the Georges have in mind. Scott George said whether they proceed or not, they’re grateful for the USDA grant because it’s helped their family take a very realistic look at the value-added proposition they’re considering.

The goal of the USDA Value-Added Producer Grants program is to generate new products, create and expand marketing opportunities, and increase producer income. The grants are given to individuals, producer groups, farmer or rancher cooperatives, and producer-based business ventures.

For more information on the grants, go to: http://www.rurdev.usda.gov/bcp_vapg.html

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