New dairy processing plants in Pennsylvania could reduce supply chain costs: Study

A new study carried out by the Pennsylvania Department of Agriculture and Center for Dairy Excellence in the US has suggested that encouraging non-American cheese producers to expand their operations in the state could significantly reduce overall supply chain costs.

The report also indicated that such initiatives by the state government will enhance the marginal value of milk as well as create more than 1,000 employment opportunities, and generate nearly $1.5bn in economic activity to the state.

Jointly funded by the Wolf administration and the Center for Dairy Excellence, the study was carried out by three experts in supply chain management, dairy policy and agriculture economics.

The authors of the study also noted that by attracting investments between $430m and $600m, the government will not only expand Pennsylvania’s dairy processing capacity but will also improve the value of dairy products produced in the state between $599m and $921m.

Pennsylvania Agriculture Secretary Russell Redding said: “Dairy is a large part of our agriculture industry, and we know there are too many dairy farmers struggling now because of a glut in the market for fluid milk and persistently low prices.

“While there is some reason for optimism down the road, the reality is that the market is unlikely to change measurably in the short-term under the status quo.

“That is why Governor Wolf and his administration have been working aggressively to expand the processing capacity in Pennsylvania – adding value here, which will boost demand, offer better prices to farmers, and reduce costs for processors.

“This study paints a very promising picture of the potential that exists in Pennsylvania.”

According to the study experts, the government should also focus on the plants that produce other products such as ice cream, whey protein concentrates, lactose, and Greek yoghurt, in order to support milk producers in the state.

Redding further added: “This report makes clear that there is tremendous potential in Pennsylvania and that dairy processors should seriously consider the state when making their site selection decisions.

“Since taking office, Governor Wolf has invested tens of millions of dollars in Pennsylvania’s agricultural industry, and he is committed to using every available resource to improve our dairy economy.”