Evaporated Milk, California Co-Ops Play Growing Role in U.S. Dairy Industry

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Researched by Industrial Info Resources (Sugar Land, Texas)--Industrial Info is tracking more than $3.4 billion of investments in dairy and related segments of the U.S. Food and Beverage Industry, including $404.4 million in the growing evaporated (powdered) milk segment.

Evaporated milk projects make up just less than 12% of the active dairy projects currently tracked by Industrial Info.

One of largest projects in the segment is the $100 million, grassroot evaporated milk plant planned by Hilmar Cheese Company (Hilmar, California) in Turlock.

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One of the primary factors influencing the growth is higher demand from the developing world and China.

Another potential factor is a campaign by three major California dairy co-ops to form a new Federal Milk Marketing Order (FMMO) to allow producers to restrict the supply of milk in order to raise milk prices. FMMO programs date back to New Deal-era legislation under the Agricultural Marketing Agreement Act of 1937. Currently, there are 10 separate FMMO blocs across the U.S.

California is the only major milk-producing state that has not formed an FMMO.

Industrial Info is tracking $679 million in investment spending for dairy projects in California, including $250 million for evaporated and powdered milk projects.

Industrial Info is tracking $790 million of investments in non-FMMO bloc areas (California, Nevada, Utah, Wyoming and Maine) and more than $2.6 billion in FMMO bloc regions. It is unknown as to how the California FMMO movement would affect the investment spectrum. If taken at face value, higher milk prices in California would favor dairies and diary co-ops, such as California Dairies Incorporated (Visalia, California), across the U.S., and disfavor third-party milk buyers.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.