Is there too much milk or not enough? Not enough going to the right market says Visalia-based California Dairies Inc CEO Andre Mikhalevsky. ”Right now we can process only 60% of our members milk.” That means 40% goes to fluid milk where the profits are not that high with little room for expansion, he says.
Instead,“the best return for our members is to dry the milk and ship it for export” says Mikhalevsky.”We can make a lot more money.” Top destination – China where they need a boat lead of baby formula.
Agreeing with this view is CDI board member John Moons who runs a dairy just a few miles west of Hwy 99. “With the leadership if Mr Mikhalevsky – we’re going to take our co-op to the next level.”
Moons says CDI’s goal is to invest in technology to make higher end spec’ powder that lasts longer without refrigeration. “We have some dryers that have been upgraded to produce these products but we need to do a major upgrade at all our plants.” Moons says besides equipment upgrading to make these long shelf life powders requires unprecedented levels of cleanliness in the production rooms to reduce bacteria levels and slow spoilage.
CDI filed a building plan review heard April 10 with the City of Visalia for two new 100 foot evaporator/dryers and a 10,000 sf building that would house a new lab along with a production room. The two new dryers would be added to the 13 dryer units already in place at the 52 acre Visalia plant – already the single largest powdered milk-producing site in North America. The new dryers would handle powder with increased shelf life.
Investment here is already in excess of $250 million.
In a phased expansion, Visalia – the co-op’s newest production facility -is poised to get larger still. Based on what appears to be about a 15% expansion in Visalia right away the co-op’s new strategic plan calls for upgrading their Tipton powder/butter plant as well.
The strategic plan outlined in this months CDI member newsletter, calls for 4-phases that includes adding enough capacity to process an additional 150 loads of milk a day – adding 7.5 million pounds of milk capacity to the 10 million pounds a day already in place, a 75% increase. That would be some four year away.
In the five to ten year horizon the cooperative would look to build a new “greenfield” plant to produce specialty products for the export market,says the newsletter.