Kansas will be welcoming a new Chinese company and the Dairy Farmers of America to build a $100 million processing plant in the state, The Associated Press recently reported.
The location of the plant has not been publicly announced as of yet, but some experts believe it could be constructed in western Kansas since the majority of the state's milk production comes from that region, the Kansas City Star reported.
The Chinese-based dairy company would be able to produce roughly 88,000 tons of milk powder annually, the source reported. The new collaboration for Kansas is a major victory in many industry experts' eyes since the U.S. was able to obtain a large portion of China's interest with its surging demand for dairy products.
The milk powder will be able to be exported without any fears of spoilage since it can handle shipping conditions.
"It's kind of our growing up," Alan Levitt, vice president of communications for the U.S. Dairy Export Council, explained, according to the Star. "To put up a plant geared to exports is very significant."
Little information released
There has been little information released so far about the new dairy processing plant, but the Kansas dairy farmers and Inner Mongolia Yili Industrial did confirm the partnership, the source reported. Rick Smith, CEO of Dairy Farmers of America, recently explained that Yili is one of the top Chinese dairy processors, and was a perfect fit with the U.S. association.
"Today, we have committed to an historic initiative to bring DFA and Yili even closer together," said Smith, according to the source.
The early reports show that the Dairy Farmers of America will support the new Kansas dairy plant with $70 million and Yili will contribute $30 million for construction, The Wall Street Journal reported. Pamala Ruegg, associate professor of dairy science at the University of Wisconsin in Madison, explained that it's currently all about demand in China, the Star reported. Robin Reid, associate professor for agriculture economics at Kansas State University agreed with the strength of the Chinese demand for daily products as well.
"Anything that helps demand is certainly going to help hold up prices," said Reid, according to the source.
With the new plant still in its infant stages, dairy processors have to look toward selecting the best and most effective sanitary shell and tube heat exchangers. Having these devices will ensure the best products without significant downtime.