However, some area farmers said that while the deal is great news for the area, its impact on local dairies remains unknown.
“The question is, are they going to take the local dairies?” said Chemung County Farm Bureau President Ashur Terwilliger. “That’s the big question.”
“The whole situation, it’s been on the top of our radar list for quite some time here now,” said Paul Wolcott, operator of Lent Hill Dairy Farm in Cohocton and President of the Cohocton Milk Producers Cooperative.
The plant under Kraft Heinz served as a reliable source of business for regional dairies.
“That plant under Kraft, it was taking in roughly two million pounds of milk a day,” said Robert Nichols, Steuben County Legislator along with owner and operator of Nichols Dairy in Addison. “That figure’s about… 30,000-32,000 cows it takes to fill that order. That’s a big order, and it provides a market for that many cows.”
Upstate Niagara is a dairy cooperative of 360 dairy farms around Western New York. Last week, officials announced the company had reached an agreement of intent to purchase the Campbell dairy plant from Kraft Heinz, who intended to close it if a buyer couldn’t be found.
The two parties said the deal should close in about 30 to 60 days.
A senior director with the company said last week following the announcement that Upstate Niagara’s still in discussion with its “membership side of the business” about any possible business arrangements with local dairy suppliers. What the company intends to do won’t be known until it reaches a final agreement with Kraft Heinz, according to other farmers.
Wolcott said the Cohocton Cooperative produces about 15 million pounds of milk a month and around 180 million pounds a year, selling a lot of it to the Campbell plant at its peak production under Kraft Heinz.
“That’s close to $40 million worth of milk that we’re not sure is going to have a place to go or not,” he said. “And that’s just the Cohocton Cooperative.”
“The thing is, Upstate can use all of their (own) milk, or they can buy milk from cooperatives or farms around here,” Nichols said, adding that he’s not aware of the company’s internal workings and isn’t speculating what it will do. “They’re in the driver’s seat and they know what their business plan is.”
Nichols said he also produces milk for the plant under Kraft Heinz.
If Upstate Niagara decided to supply milk only through its membership, Nichols said he and other farmers who are not members will need to find another dairy processing plant further away, which would increase shipping costs.
According to Wolcott, the northeast dairy industry is already dealing with a surplus and processors within reasonable distance aren’t looking to purchase more milk that he’s aware of.
Regardless, the farmers said Upstate Niagara’s commitment to buy the plant is still much better for the area than the alternative.
“There’s still a lot of questions to be answered, and as president of the Cohocton Cooperative and a dairy producer, we’re still not sure whether they’re going to be buying any additional milk or not,” Wolcott said.
“But it is really good news that it is going to stay open,” he said.
“It’s good for the Northeast, and it’s good for the area to have the capacity, but for certain farms it may cost us money,” Nichols said. “But it would have cost us money anyway if it closed.”
Officials said the plant under Upstate Niagara will switch from producing string cheese and other Italian varieties to block mozzarella and ricotta.
Source: The Leader
Link: http://www.the-leader.com/news/20170710/dairy-farmers-cautious-over-cheese-plant-purchase