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New projects indicate growth in SD dairy

FARGO, N.D. -- Officials say construction of a $35 million milking dairy southeast of Sioux Falls, S.D., and the grand opening of a $140 million cheese plant in Brookings, S.D., are two big indicators of investment in the region's dairy industry.

FARGO, N.D. -- Officials say construction of a $35 million milking dairy southeast of Sioux Falls, S.D., and the grand opening of a $140 million cheese plant in Brookings, S.D., are two big indicators of investment in the region's dairy industry.

But there's more to come, says Roger Scheibe, executive director of South Dakota Dairy Producers and industry relations manager for the nine-state Midwest Dairy Association. The projects are among further signs of the so-called I-29 dairy corridor fulfilling its promise of growth.

"We're definitely a hot spot for development in the upper Midwest," Scheibe says.

Lincoln County's Dakota Plains Dairy near Canton, S.D., is projected to bring 35 permanent jobs, milk 3,250 cows per day and have 1,000 mature Jersey dry cows and heifers. The milk will go to the Agropur plant in Hull, Iowa, which is also planning an expansion. Dakota Plains Dairy jobs will pay $35,000 to $100,000 a year and investment in the operation will be $14,042 per cow. The total annual economic impact is estimated at $59.86 million, with $8 million to $10 million in annual purchases of inputs for silage, haylage, corn and other products.

Two other dairies in Grant County near Milbank, in the northeast part of the state, are also under construction. Victory Farms has a 3,000-cow herd and is building a 5,000-cow Jersey dairy herd. A.J. Bos, which owns a dairy in Brookings, is building a 5,000-cow dairy on the west side of Grant County.

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Demand for protein

Scheibe says the world is demanding increased levels of proteins. U.S. dairy domestic demand is strong and exports have increased in double-digits for several years, he says.

"Where is that increased production going to come from?" Scheibe says. "We'd like to see it in the Upper Midwest. If you start importing products, you start losing the food safety checks. The cows are going to be someplace, if you start looking at it from that perspective."

Scheibe says the processors have been committing to increasing production.

Also, the Bel Brands MiniBabybel cheese plant in Brookings started producing in July 2014 and initially will require 500,000 pounds of production daily, or the equivalent of about 7,700 cows. The 170,000-square-foot facility will employ 250 people.

Officials of Bel Brands USA, based in Chicago, have said access to milk, a business-friendly community and South Dakota State University, which has a dairy science program, were factors in locating there.

Meanwhile, Davisco in Lake Norden, S.D., plans to increase from 2.5 million to 3 million pounds capacity to 5.5 million (84,600 cows equivalent) to 6 million pounds.

"If you look at the existing production and expansions, you're looking at (a need for) 90,000 cows along the I-29 corridor," Scheibe says. "That's a doubling of the 98,000 cows in South Dakota, but not all of that expansion has to be in South Dakota."

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Scheibe says all of the production increases in South Dakota are a result of efforts of producers and lenders. He says there is little public sector incentive support, but credits Gov. Dennis Daugaard for promoting the region's natural crop, water and infrastructure advantages.

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