DFA, Chinese Firm to Build $100 Milk Powder Plant
A Chinese company and the Dairy Farmers of America, a dairy cooperative based in Kansas City, have announced an agreement to build a $100 million plant in the state that will squeeze out 88,000 tons of milk powder a year. The plant's location was not disclosed, but it's thought that western Kansas is the lending contender because that's where most of the state's milk production is located.
The Kansas City Star reports that industry observers greeted the deal as a milestone in this country's interest in grabbing a bigger share of China's surging demand for dairy products. Milk powder, without the weight and spoilage issues of fresh milk, is suitable for export.
"It's kind of our growing up," said Alan Levitt, vice president of communications for the U.S. Dairy Export Council. "To put up a plant geared to exports is very significant."
The Kansas City cooperative, owned by 13,000 dairy farmers, disclosed little about the deal except to confirm the partnership with Inner Mongolia Yili Industrial Group and that it's an outgrowth of a strategic partnership formed two years ago with the Chinese company.
The partnership calls for Dairy Farmers of America to contribute $70 million and the Chinese company $30 million to build the plant, according to the Wall Street Journal, which cited a filing at the Shanghai Stock Exchange.
The plant should also be a boost for Kansas dairy farmers who have 137,000 cows and provide $592 million to the state's economy.