Additional details about the two new cheese processing facilities locating in St. Johns, a city 20 miles north of Lansing, were disclosed as company representatives made their cases for financial assistance in front of the Michigan Commission of Agriculture and Rural Development on Aug. 22.

With support already garnered from the city of St. Johns, Bingham Township and Clinton County, the commission unanimously approved Irish-based Glanbia and three U.S.-based partner companies for an Agricultural Processing Renaissance Zone, the primary incentive tool used to support massive investment projects.

The commission also approved a $750,000 grant for the cheese plant named Spartan Michigan and a $250,000 grant to Proliant Dairy Michigan, which will use the cheese plant’s byproducts to manufacture whey permeate products for both human and animal consumption.

Those incentives are on top of the city’s 12-year, 100% property tax exemption.

Together, both projects constitute a $550 million investment, and that’s welcome news as Michigan’s dairy industry has been growing beyond its means, lacking processing ability and forcing expensive shipping of milk out of state for processing.

According to Michigan Department of Agriculture and Rural Development, Michigan’s net price for milk is at the bottom for the nation, and between September 2017 to August 2018, the state lost 127, or 8%, of its dairy farms, going from 1,458 to 1,331.

“A lot of companies have come together to solve a problem that’s too big for any one of them,” said John Murphy, vice chairman of Glanbia, during the meeting.

In total, the project is supported by an estimated $27.6 million in grants and tax abatements from Michigan Strategic Fund, Michigan Department of Agriculture and Rural Development, and Michigan Department of Transportation.

According Chuck Courtade, northwest region manager for DFA Mideast Area, the cheese plant will benefit Michigan producers by at least, if not more than, $50 million annually in premiums, transportation and savings on discounts to sell milk out of state.

“That benefits all Michigan producers,” he said. “We guesstimate that growers will see a $1 to $1.50 [per hundredweight] improvement in the milk price,” he added, which would include a move from Class IV milk into the Class III price category.

The partnership
Glanbia, Ireland’s sixth-largest company with 6,000 employees, has partnered with dairy cooperative Select Milk Producers Inc. and Dairy Farmers of America to form Spartan Michigan LLC. The dairy processing facility will take in more than 8 million pounds of milk per day, producing 800,000 pounds of cheese per day and roughly 40,000 pounds of whey, while creating 259 new jobs.

Proliant Dairy Ingredients is investing $85 million in an adjoining facility, which will manufacture whey permeate products and employ 38 new workers. The cheese byproduct will be piped directly about 200 yards from Spartan Michigan to Proliant.

The 147 acres for the project is in the St. Johns Business Park on the northern skirts of town, and it includes acres acquired from Bingham Township, with a 425 Agreement to share any potential future tax revenues.

On Aug. 27, the St. Johns City Commission approved the site plans for both Spartan Michigan and authorized E.T. MacKenzie Co.’s work on the drain relocation project.

According to the Clinton County Register of Deeds, to date, the first deed for the property came through Sept. 14. Motz Development sold 55 acres to Glanbia for $990,000. On Sept. 27, the city of St. Johns sold 82 acres to Glanbia for an amount that is confidential unless court ordered through an Estate Transfer Tax Valuation Affidavit.

St. Johns City Commissioner Bob Craig said, “We believe this is really going to be a long-term sustainable type of plant,” noting that 10 years ago the city lost automotive parts manufacturer Federal Mogul and the 700 jobs it employed. “We’re hoping for additional commercial and residential developments in the St. Johns area, and we’re excited to partner with the dairy industry.”

Resource needs
Glanbia, which admits to being a big energy and water user, is looking to mitigate that use through manufacturing design. The plants will draw 300,000 gallons of potable water from the city daily. Between the joint facilities, “we will create 1 million gallons of water a day in wastewater,” said Murphy, who noted that an on-site waste water treatment plant has been approved by the Michigan Department of Environmental Quality.

Because upward of 80% of milk is water, Proliant will send back the leftover “cow water” to Spartan, where it will be refined, purified and reused. “It’s not going down the drain. We’re trying to be as conscious and sustainable as possible,” said Mark Peterson, vice president of business development for Proliant Dairy Ingredients.

Peterson also said Proliant’s mission is to take solid streams that are typically viewed as waste and create value. Proliant’s seven companies do over $1 billion in sales annually, he said, and have more than 25 years of experience in the dairy business.

The St. Johns facility will have the world’s largest permeate dryer in the world, cranking out 400,000 pounds of finished product a day. The dryer itself will be processing more than 20,000 pounds an hour, he said.

Murphy called the project very complex. “We have two different owners and three construction sites and 500 tradesmen — that’s just for the construction, even before we start taking the milk. That’s a true partnership.”

Project officials are convinced they are in the right place at the right time, referencing Michigan’s milk production and lack of sufficient processing. Glanbia, DFA and Select have worked together in the past in New Mexico, and are using it as a model for Michigan, according to Murphy.

The New Mexico plant has already doubled its capacity and a buildout has been planned for Michigan even before construction starts, which was expected in September. Spartan Michigan hopes to start receiving milk by October 2020.

Milk will come in around the clock daily, and shipments will go out 6 a.m. to 6 p.m. About 100 trucks a day are expected to enter the plant, most likely a mix of tankers and supertankers coming from Walker Road on the south side. Employees enter off Technical Drive, which is inside the business park.

Once at capacity, the plant is expected to take up to 25% of the Michigan’s milk production. Glanbia, already the No. 1 producer of American-style cheddar cheese in the world with 20% of that market, is expected to jump to 25% of that market. Glanbia is also very active in the whey market, which is dried and sold into the baby formula and body building markets.

“It’s a big deal; there’s a lot going into this project,” Murphy said.