MONEY

$58M cheddar cheese plant coming to Noblehurst Farms

Todd Clausen
@ToddJClausen
  • European dairy company lands a stake in a Livingston County cheddar cheese facility.

Cheddar cheese will be produced and processed at a $58 million facility in Livingston County, under an agreement by a European dairy cooperative, the Dairy Farmers of America and eight area farmers.

White cheddar is likely one of the lines that Denmark-based Arla Foods will produce with the help of farmers from Livingston County.

The facility at full capacity will produce roughly 15 million pounds of cheese annually, and is expected to open in the fall of 2017 next to a creamery on the 2,500-acre Noblehurst Farms in the hamlet of Linwood. As many as 30 people will be hired for the project.

"It's a big investment in a small community," said Chris Noble, vice president of Noblehurst Farms and general manager of Craigs Station Ventures, the partnership of the eight area farmers. "I think the community is excited about the prospects (of) these long-term jobs and tying that in with an economy that is already very strong (in) agriculture."

Under the agreement, the Dairy Farmers of America will hold a 70 percent stake and have a management role, Arla will have a 20 percent stake and front $11.6 million for construction of the plant, and the area farmers will get the remaining stake and be responsible for supplying 70,000 tons of raw milk annually for the effort.

Cream of the crop

Further financial details, including possible amounts of public funding, were not immediately made available.

"Nothing at the liberty to talk about right now," Noble said. "Those are things we’re certainly in negotiations with the state on. I'd expect an announcement sometime between now and next week along those lines."

Arla already produces Havarti, Gouda, Muenster and fontina cheeses at a facility in Wisconsin. It had consumer sales revenue of $123 million in 2015, up 14 percent from a year earlier, and has a goal of doubling its 2014 posted revenue of $108 million by 2020.

The cooperative is eyeing the American market for growth, where consumers purchased roughly 11.7 billion pounds across all categories in 2015, according to the U.S. Department of Agriculture. Arla also has launched its own line of cream cheese in the hopes of growing outside of the deli section and into the dairy aisle.

"Adding cheddar to our U.S. portfolio will make us more attractive to the retailers and help increase the sales of our European products made from owner miler," said Arla Foods CEO Peder Tuborgh, in a statement.

The project still needs various approvals. Noble said the facility would have several features to reduce its carbon footprint with such things as solar panels to heat water, biogas to power the site and the ability to recycle waste water.

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"This was a long-term strategic initiation that (the Dairy Farmers of America) embarked on," Noble said of the effort with Arla Foods. “This provides a market for our milk over the long term."

The Dairy Farmers of America is a national dairy marketing cooperative of nearly 9,000 dairy farms that helped connect the European-based cooperative with the eight farmers, based in Livingston and Wyoming counties.

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Also, the Dairy Farmers of America has been involved in helping to save the Müller Quaker yogurt plant in Genesee County from closing after a partnership between German dairy giant Theo Müller Group and Quaker Oats, a unit of PepsiCo dissolved late last year.

TCLAUSEN@Gannett.com