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Valley Queen to expand operations

Greg Latza Valley Queen cheese plant
GROWTH MODE: With dairy herd growth along the I-29 corridor, Valley Queen Cheese in Milbank, S.D., will expand its processing facility, which will take three years at a cost of $195 million.
Milbank, S.D., plant expansion coincides with growth in dairy herds along the Interstate 29 corridor.

Over its 93-year history, Valley Queen Cheese in Milbank, S.D., has adapted to market drivers to meet customers’ needs. And its latest venture is a $195 million expansion that will be fully functional by January 2025.

“There were times I think when Valley Queen would have liked to have grown faster, but the milk wasn’t available,” says CEO Doug Wilke. “Right now, what’s changed is modern dairies are being built in the I-29 corridor, which allows us to have enough raw material milk to make more cheese. The last couple of years there’s been available milk, and dairy producers are willing to grow in our region right now.”

Milk for Valley Queen’s cheese, lactose and whey products currently comes from cows within a 90-mile radius of the Milbank plant, but Wilke says the dairy herd growth is occurring within a 40- to 50-mile radius of Milbank.

“Our expansion is driven by our customers’ needs. Our customers have said, ‘We would like to buy more cheese, lactose and WPC [whey protein concentrate] from Valley Queen,’” he says. “Our job is to serve our customers.”

Wilke says Valley Queen products, though found in grocery stores, will not carry the company’s label, but rather be rebranded with either a private label or a store’s brand. “We get it to customers that take a 700-pound block of cheese and cut it down into consumer-sized packages. That’s our business model.”

Wilke says the company has also been approached by dairy producers looking to expand. “We saw both opportunities and started talking with customers and then started talking with dairy producers to make sure we got the available milk and started putting our plan together to grow the business.”

Groundbreaking for this expansion, the largest in the company’s history, is slated for late May. Upon completion in January 2025, cheese production will increase by 125 million pounds and create an additional daily milk processing capacity of 3 million pounds.

Tight labor issue

With the production increases, Valley Queen will need to hire an additional 140 employees over the next three years, a task that Wilke admits could prove daunting.

“It is going to be a challenge. I don’t think there’s any doubt about that, and anyone that tells you that labor isn’t a challenge in this market is pretty blessed,” he says. “We know we’re also going to have to do things differently. We’re going to have to recruit differently, using social media and other avenues.”

In addition to recruiting differently, Wilke says the company will need work shifts that may be more “attractive” to lure employees. “But we also believe we’re an organization that offers some exciting opportunities with a variety of career paths,” he says.

Though the expansion will increase production, Wilke says the additional employees will not be solely in production. Valley Queen will also be adding personnel in sales, customer service, and maintenance and controls. “It’s going to be a three-year process, and we know we can’t hire them all six months before we start up,” he says. “We’ve got to start hiring this year and next year and the year after to build that workforce. That’s going to be a challenge.”

Wilke looks to the talent pool offered by South Dakota State University in Brookings, with its well-respected dairy and food science department, as well as Lake Area Technical College in Watertown, S.D.

“We have over 20 South Dakota State grads here already in lab, in quality and in supervision,” Wilke says.

He adds that many of the maintenance and control staff have come out of LATC. Area high schools will also be recruited to help fill the hiring need. “We’re going to have to use all the tools in the toolbox to get fully staffed,” he says.

According to a Valley Queen press release, in addition to expanded capacity in Milbank, the company will establish a distribution center in western Wisconsin to better serve customers. This distribution center will allow for more efficiency and flexibility in transportation and logistics.

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