Agropur to expand
Cheese plant in Hull, Iowa, will double capacity
3/11/2013 11:01:00 AM
HULL, Iowa - Agropur, Inc. has announced plans to double the capacity of its Hull, Iowa, cheese plant. This expansion is slated to take place within the next two years.
Agropur, Inc. is based in Longueuil, Quebec, with its U.S. headquarters located in Appleton, Wis. The Hull facility is Agropur's second largest dairy plant among the 28 milk processing facilities it owns in the United States and Canada.
The Hull cheese plant was founded in 2008 by Rock Valley, Iowa, dairy farmers Shep and Natalie Ysselstein and their family. Originally known as Green Meadows Foods, the manufacturing facility was acquired by Agropur in December 2009.
"We are currently running 24 hours a day, seven days a week and often exceed our target processing capacity of 2.5 million pounds of milk per day," said Tim Czmowski, General Manager of the Hull plant.
Agropur's Hull cheese plant currently employs 130 people. It produces 15 varieties of cheese and three different kinds of dried whey products. The proposed expansion would involve adding 65,000 square feet to their current facility and would put an estimated 50 new employees on their payroll.
"We already have much of the infrastructure in place to help make our plant easily expandable," Czmowski said. "Our facility is state-of-the-art and was planned with our Phase II expansion in mind. It has taken almost five years, but we have now reached the point where we feel we can expand."
This forward-looking approach is paying off. For instance, with only a few minor modifications, Agropur's whey processing facilities are capable of handling the proposed increase in cheese production. In addition, numerous equipment upgrades have been undertaken at the Agropur plant over the past four years.
Doubling the Hull plant's capacity would mean finding an additional 3 million pounds of milk per day, roughly equivalent to the production from 45,000 cows. Czmowski believes that this additional milk can be obtained through the expansion of existing dairies and from bringing new dairy operations into the region.
"We have been actively working on milk development in this region," Czmowski said. "Our focus has been on developing dairies within 100 miles of Hull and especially in the southern half of the I-29 Corridor. The dairy initiatives in Iowa, South Dakota and Nebraska have been very strong."
As part of this development effort, Czmowski recently accompanied South Dakota Governor Dennis Daugaard and other state officials to the World Ag Expo in Tulare, Calif. Their goal was to recruit dairy farmers from other areas to relocate to the state.
"Governor Daugaard has worked very hard to develop South Dakota's dairy industry," Czmowski said. "Agropur sees the Upper Midwest as a growth area in the dairy industry, much as it was years ago."
Czmowski puts things in context by citing historical data.
"In 1960, the seven counties in southeastern South Dakota had a total of 53,700 dairy cows," he said. "By 2010, that number had dropped to 24,000 head. Simply getting back to the same number of cows we had in 1960 would add nearly 30,000 cows to this area and would put us well on our way to our goal of 45,000 more cows."
Agropur has been continuing to work with state, county and township government.
"Dairy farming has a huge economic impact on our rural economies," Czmowski said. "We estimate that 80 to 90 percent of the revenues we send to our producers in their milk checks is spent in the locality where the milk was produced."
Czmowski said there are several excellent reasons for dairy operators to relocate to the Upper Midwest.
"South Dakota, Iowa and Nebraska are currently milk deficit areas, with insufficient milk to meet processing demands. This region also has abundant feed, is friendly to livestock production, and has a favorable tax and regulatory environment," he said.
The plan to double the production capacity at Agropur's Hull facility is being driven by demand.
"Demand for our products has been very good," Czmowski said. "We have developed great relationships with our customers. In their minds, this growth is very desirable. Agropur has been exceptionally supportive of our goal to complete Phase II of our facility. The company continues to build for the future by simultaneously expanding this and other plants and by acquiring existing dairy plants."
Czmowski feels that strong milk prices will help drive dairy expansion in the region.
"We at Agropur have been able to maintain a very competitive milk price. As we grow, our volume should position us to remain competitive and provide one of the most competitive milk prices in the region."
Agropur's plan is to recruit milk for its plant during the next year. They hope to commence construction on their expansion in 2014 and bring the expanded facilities online in 2015.
"We are very appreciative of the success we've had to date," Czmowski said. "We look forward to harnessing part of the U.S. dairy industry to benefit the Upper Midwest."