Dairy processors race to keep up with growing milk production
Dairy farms in the US are producing more milk than they can process, according to a new report from CoBank's Knowledge Exchange Division.
Every year US Dairy Farmers produce 3 billion more lbs of milk than the year before.
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Within a few days, this milk needs to move from a farm to a processing plant so that it can be produced into drinkable milk, cheese, butter and other dairy products.
Therefore, soaring production growth is putting increasing pressure on the processing industry because processing plants are struggling to keep up with all the additional milk that is produced.
Over recent years there has been increasing investment in milk powder plants as these plants are the least expensive to build, says the report. Powdered milk plants also allow processors to tap into export markets and international demand.
Cheese plants have also seen investments although these are predominantly in the form of joint ventures between dairy cooperatives, cheese companies, and international firms.
As milk production continues to grow the processing sector is going to have to invest in new plants as well as updating existing facilities, notes the reports.
They will need to do this in a way that focuses on consumer demand rather than just building plants for the sake of processing milk.
The CoBank is a $125 billion cooperative bank which provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers across the US.