New Oregon Plant to Draw Cows to Cowless County

By Kate Sander, Chief Editor, Cheese Market News

BOARDMAN, OR — Build a plant and they will come. That's the philosophy of Tillamook County Creamery Association as it prepares to break ground on its new satellite plant here.

Or at least that's almost the philosophy. The co-op isn't just building the plant and hoping cows will come. Instead, Tillamook has been busy working with producers in order to guarantee a steady milk supply when its satellite plant opens in the spring of 2001.

Right now, though, there aren't any dairies in Boardman, OR, a Columbia River town east of the Cascades. Harold Schild, president and CEO, Tillamook County Creamery Association, says the co-op wanted it that way.

"We didn't want to get into a bidding war or cannibalize someone's milk supply," Schild says, explaining Tillamook wanted a milk supply dedicated to the plant and producers who would take pride in Tillamook products.

Schild hopes he has found that in the six producers who have now signed on to produce the 1.5-1.6 million pounds of milk that the satellite plant will need daily. Other producers interested in supplying the Boardman plant are now being put on a waiting list, Schild says.

The six producers, with a total of roughly 20,000-25,000 cows, will be moving to the Boardman area from California and Washington. Some of them will be relocating their operations while others will be starting their Boardman area dairies in addition to their other farms, Schild says.

While the producers may be coming from just two states, Schild says their cows will come from all over the country. He doesn't expect that finding the heifers and cows will be so difficult for the producers as finding the animals for the right price as heifer prices remain strong.

Ideally, the dairies will be a good mixture of Holsteins and Jerseys, Schild goes on to say. Tillamook is requesting a 50/50 split, but will be satisfied if the makeup of the herds is 40% Jerseys.

"How the numbers will sort out in the end will depend on what's available," he says.

Tillamook plans to break ground for the satellite plant, which will operate as a wholly-owned subsidiary called Columbia River Processing Inc., this next month and hopes to have the plant fully operational by summer 2001. In the meantime, the dairies, which will be contracted to produce milk for Columbia River Processing and won't be members of Tillamook Country Creamery Association, will be starting up their operations as well.

The satellite plant will be working with WestFarm Foods (formerly Darigold) to balance its milk supply, Schild adds, explaining that WestFarm Foods will either be taking excess milk production or filling in milk if needed. WestFarm's Sunnyside, WA, plant is about 80 miles away from the Boardman plant, he notes, making them close enough to work together but not so close that the two co-ops will be battling for milk supply. WestFarm also will be working with Columbia River Processing by taking its whey solids. The satellite plant won't have a whey dryer but will concentrate the whey through reverse osmosis before sending it to WestFarm Foods.

The new dairies in Oregon will be anything but typical for a state where there are about 400 dairies with an approximate average of 220 cows. In fact, Tillamook producers themselves average only about 120 cows per herd.

However, the Boardman area is well-suited to large dairies, Schild says. Bill Broderick, extension agent in Morrow County, concurs. There's little rain, no urban encroachment and plenty of feed available, Broderick says.

The plant's location also makes trucking the cheese back to Tillamook convenient. Being situated on the Columbia River, trucks don't have to go through any Cascade mountain passes and can make it back and forth from Tillamook to Boardman in one day.

All of the Tillamook brand cheese made at the plant will be shipped back to Tillamook for aging and packaging. The operations in Boardman will be fairly low-key, Schild adds. The plan is to keep the focus on the Tillamook operations and have the new plant contribute to the expansion of the cooperative's brand.

An extremely important element of the satellite plant will be its ability to produce product that's consistent with product produced in Tillamook. That, in part, is why, for example, Tillamook wants a mixture of Jerseys and Holsteins. On the Oregon Coast, about 30% of the co-op's milk is from Jerseys.

With Boardman product that is indiscernible from the Tillamook product, the cooperative hopes to expand its market primarily west of the Rockies but also in the East. The market demand for Tillamook cheese has been growing, but the cooperative has been trying to hold it at bay for the past couple of years because it simply doesn't have enough cheese.

Growing the Tillamook brand will still take time though. The Boardman plant will start out with about a quarter to a third of the cheese being marketed under the Tillamook name, with the rest of the cheese being sold to other cheese buyers. Eventually, Tillamook plans to increase the percentage of cheese being sold under the Tillamook brand.

The satellite plant also is being built with plant expansion in mind, with a design that would make increasing the plant's capacity relatively easy. How successful Tillamook is at selling bulk cheese to other companies while at the same time expanding its brand name will determine the cooperative's expansion plans.

The new plant isn't Tillamook's only construction project either. To handle all of the additional cheese, about 150,000-lb a day, as well as the Tillamook plant's current production, the cooperative is constructing a new cold storage facility in Tillamook, complete with a computerized storage and retrieval system. The project is set to be completed in April. CMN

Other top stories from this week's issue of Cheese Market News:
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• Land O'Lakes, Mitsui to jointly build California cheese plant
• Behind the scenes work on dairy policy continues
• FDA approves new health claim for soy, but little fallout expected for dairy

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