Portales plant supplies opportunities, increases value for members

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For Dairy Farmers of America, expanding its global footprint and increasing commercial investments does not just mean building new plants or acquiring new companies. There are often opportunities in existing assets.

For more than 10 years, DFA and Fonterra Co-operative Group, a New Zealand-based dairy cooperative, have been equal partners in DairiConcepts, which develops and manufactures hard Italian cheese, cheese and dairy powders and cheese concentrates. The joint venture has eight manufacturing plants throughout the United States.

In 2012, DFA was presented the opportunity to purchase 100 percent of DairiConcepts’ facility in Portales, N.M.

“Purchasing the Portales plant benefits DFA in more ways than one,” says Tim Theisner, general manager for DFA’s Southwest Area. “Not only does it provide an opportunity to serve global customers with ingredients they need, it also provides a more reliable return on our members’ milk.”

With the ability to process 185 loads of milk per day, or more than 9 million pounds of milk, the Portales facility offers a stable home for DFA members’ milk within a 400-mile radius from the city.
The plant produces nonfat dried milk (NFDM), milk protein concentrate 70 and 85, skim milk powder, cream and condensed milk. Cream and condensed milk are mostly sold to domestic customers, including Borden for butter and ice cream.

The powder products from the plant have appeal in the international market, with milk protein concentrate being sold for a wide variety of products, including baby formula and protein energy drinks.
Portales can accommodate customer specifications, making several dairy products simultaneously and transitioning from one product to the next seamlessly.
The Portales plant also serves as a balancing plant for DFA.

“Milk production levels fluctuate, due to seasonal production swings and changing customer demand, and when we have a surplus of milk, Portales can utilize that surplus in the Class IV market; making an efficient market, demanding products that are profitable,” says Ed Steven, site manager for DFA’s Portales plant. “Also, dairy products made at this plant allow DFA membership to compete globally.”

While many of the products made in Portales are consumed domestically, 75 percent of the plant’s NFDM is exported. Currently, dairy products made in Portales are being exported to Mexico and Canada, with pending contracts on the horizon to both China and Indonesia. Steven says with eastern countries increasing their protein consumption in terms of dairy products and with the recent drought in New Zealand, world markets are fairly stable.

“When demand is higher than supply, DFA has room to capitalize with international sales,” says Kevin Field, vice president of sales and marketing. “DFA’s strong sales and marketing team gives DFA the opportunity to now focus on growing international sales.”