Thirty years ago, a group of milk farmers formed an alliance to bring stability to their dairy businesses and to improve products so that sales could continue to grow and prices would provide a reasonable return on investment.
The initial group included seven farms and has expanded to 128 farms in upstate New York.
Innovate to Survive
Over the last decade, as fuel prices escalated, farmers grew weary of having their milk trucked long distances to have it processed, cutting deeper and deeper into margins. After the idea for a local processing plant was hatched, the farmers began to look for financing and went to the Farm Credit Bank, which became the projects major lender with 40% of the cost of the plant shouldered by farmers.
New York State kicked in $4 million and tax credits and the New York State Energy Research and Development Authority added $1 million for energy saving technology.
The Milk Processing Plant
In the end, the 156,000 square foot Cayuga Milk Ingredients processing plant was built at a cost of $101 million and it is estimated the company will gross $170 million in annual revenues. The plant also employs 60 people collectively earning $3.5 million a year. The plant took its first delivery of milk in June 2014 and has since processed 25 million pounds of milk.
The company will continue to grow and expand, bringing further benefits to the local economy. The new plant processes millions of pounds of milk and breaks it into fat, proteins, carbohydrates, water, minerals and vitamins where these components, when separate, are worth more than if the milk were to be sold without refining.
Products have been expanded to include pasteurized cream, whole milk powder, liquid permeate, condensed milk, skim milk powder for adults and infants, non-fat dry milk and milk protein concentrates and isolates. The company is now exporting some of those products overseas to a number of countries, vastly expanding its markets.
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