It is well-known that market tensions have crippled the county’s dairies.
What in the earlier part of the 20th century was considered a thriving industry contributed to this year’s agriculture and livestock report less than 2 percent of its value worth roughly $1.9 billion.
Just now, droughts in the Midwest are causing feed prices to rise while dairy producers point out that state regulations in various areas such as waste management are increasing operating costs even more.
Dairies across the board have been affected. In California, many have in the past five years either gone out of business or relocated to other states.
Imperial County wasn’t spared from closures and earlier this summer KF Dairy — one of the few remaining dairies left in the Valley — auctioned off its stock of some 3,000 cows to the highest bidder.
Meanwhile, Imperial Valley Cheese, the only producer of Muenster and Swiss cheese in California, was reportedly in the process of closing its operation.
But there seems to be a glimmer of hope for the local dairy industry.
Stewardsmith, a developing company from Vancouver, Wash., is in the process of simultaneously acquiring KF Dairy, Imperial Valley Cheese and Bullfrog Dairy, said Stewardsmith chief technology officer Garrett Smith.
“We are here to make a sustainable profitable operation,” said Smith. “We are going to optimize what they do with the manure.”
The idea is to consolidate these companies under Stewardsmith and introduce a waste-conversion system that could offset losses so as to create profit, all while keeping the local expertise employed.
This sustainable operation will be called Imperial Dairy Co., and to achieve these eco-friendly operations Stewardsmith would use a patented process to extract energy from the cows’ manure, all while cheese production continues.
In addition, whey, which is the liquid byproduct of making cheese, could also be used for bioenergy production, he said.
The energy created would be used to offset the plant’s energy cost, said Smith.
Just recently, Gossner Foods Inc. stated to the California Department of Agriculture that disposing whey creates significant financial cost to its operation and suggested that cost increases were pushing the plant toward closure and relocation.
But what dairies traditionally see as liability, Stewardsmith sees as an opportunity, said Smith.
He noted that Stewardsmith used to contract for manure only, and added that integrating processes may prove to be more profitable.
Stewardsmith is now engaged in “final negotiations,” said Smith, who estimates the economic impact of the whole operation could push the $100 million mark per year once all the components are put in place.
Moreover, KF Dairy cows will have to be repopulated, said Smith, and the same will happen with jobs that have been lost.
He added that at least 60 to 70 full-time employees would be kept year-round, and that the impact would be much greater as other businesses such as feed production would be involved.
When asked about whether the plant would continue producing Muenster and Swiss cheese after the reorganization, Smith responded that Gossner Foods asked that Swiss cheese production be discontinued, something Stewardsmith will honor, he said.
The plant is expected to produce only Muenster cheese after the acquisition, said Smith, and the product will be sold within the state, though the possibility to sell cheese across the border is being evaluated.
Selling the product more locally means operating expenses will be reduced further, he said, and “that’s another economic advantage.”
Smith expects Imperial Dairy Co. to be fully operational within a year.
Meanwhile, Ed McGrew, who was involved in a concerted effort involving governmental, agricultural and economic development agencies to bring more dairies to the county, welcomes the idea.
“I’m really in favor of the dairy industry.”
Still, he is “cautiously optimistic” about the project, said McGrew.
County Agricultural Commissioner Connie Valenzuela, said she hadn’t heard about this project by Friday, but also welcomes the project.
“Any business in the county that remains means that you are not losing (those) jobs,” she said, and added the project “would be good to our crop value.”
Staff Writer Alejandro Davila can be reached at 760-337-3445 or adavila@ivpressonline.com
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