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Arizona benefits from local dairy, faces land challenges

Editor’s note: As part of our series, “From Cow to Curd: A Look Across the Nation,” Cheese Market News takes a look at the cheese and dairy industry across the United States. Each month we examine a different state or region, looking at key facts and evaluating areas of growth, challenges and recent innovations. This month we are pleased to introduce our latest state — Arizona.

By Rena Archwamety

MADISON, Wis. — When Arizona shoppers buy milk, chances are they’re buying local. According to the Arizona Farm Bureau, 97 percent of the milk sold in Arizona grocery stores comes from Arizona family dairies, and Arizona’s dairy industry currently is the largest agricultural commodity in the state, edging out the beef industry this past year.

In 2017, Arizona was home to an average 203,000 milk cows, producing 5.0 billion pounds of milk. Output per cow is the fourth-highest in the nation at 24,680 pounds, according to USDA data.

“I think we would lead the country if not for the hot, humid weather in July and August during ‘monsoon season.’ Milk drops 15 percent during those two months,” says Keith Murfield, CEO of United Dairymen of Arizona (UDA), the full-service cooperative which represents all but three of Arizona’s commercial dairy farmers. “The rest of the year has great milking conditions. Mornings are cool, around 70 degrees during the wintertime. Even during May and June when temperatures hit 110, milk doesn’t really drop because producers use fans with misters on them and provide very nice conditions for milking and cow comfort.”

At the beginning of this month, UDA had 54 producers and 79 dairies that produced a total of 4.5 billion pounds of milk. However, five milking parlors are set to close between June and July for various reasons, from retirement to cow reduction to exiting the current challenges facing dairy farmers, Murfield says.

The average farm size in Arizona is large. Currently UDA membership averages 2,800 head per dairy, and Murfield predicts that number will grow closer to an average of 4,000 per producer in the future as some leave and others grow.

The Arizona Farm Bureau says the state’s smallest dairy farm has 850 milking cows, while Arizona’s largest dairies can run around 10,000 active milk cows.

• Dairy processing and products

Shamrock Farms is one of the most well-known milk brands in Arizona. It also has one of the state’s largest dairy farms with more than 10,000 cows. It was founded in Tucson in 1922 by Irish immigrants W.T. and Winifred McClelland with 20 cows and a Model T milk delivery truck. Their grandson, Kent McClelland, currently is the company’s president and CEO.

Now in its 96th year of business, Shamrock Farms is one of the largest family-owned dairies in the country and one of the top 100 employers in Arizona. It has manufacturing facilities in Phoenix, Arizona, and Augusta County, Virginia. The company produces ready-to-drink milk found in retailers and more than 50,000 quick service restaurants nationwide. It also manufactures Rockin’ Refuel protein-milk beverage, Shamrock Farms Cold Brew Coffee & Milk and a wide variety of other dairy products including sour cream and cottage cheese.

The UDA cooperative operates a manufacturing facility in Tempe, Arizona, that produces nonfat dry milk, milk protein concentrate, cream, butter, skim milk, condensed skim milk and lactose powder. It also has two cheese plants on is property — one that is leased to Wisconsin-based Schreiber Foods, and another that is home to Arizona Cheese, a joint venture between UDA and Wisconsin-based Wiskerchen Cheese Inc. Additionally, UDA is 51-percent owner of a cutting and shredding operation in Mexico City.

Other dairy manufacturers in Arizona that receive UDA milk include three bottling plants, a Greek yogurt plant (Ehrmann) and a cream cheese plant (Franklin Foods).

“UDA processes about half of our milk. Most of it stays within the state — probably 90 percent of the milk. All of our customers are within a 50-mile radius,” Murfield says. “About 20-25 percent of the milk goes toward cheese.”

Arizona also is home to a handful of smaller-scale cheese artisans. One of these is Fiore di Capra, where owner Althea Swift crafts cheese and confections as well as yogurt and kefir from goat’s milk. She also sells raw milk from her 200-goat herd in Benson, Arizona, about an hour outside of Tucson.

While Swift only sells her products in Arizona, her cheeses have won national awards through the American Dairy Goat Association and the American Cheese Society.

“Our marinated Chevres are very popular. We have six flavors, and several of those have won awards,” Swift notes. “We try to do things that go with the area — lots of spicy stuff. Chipotle, Habanero, things people in this area want, where they’re used to the heat.”

Currently Fiore di Capra is working on developing hard cheeses to use up more of its summer milk.

“Goats are seasonal. December is a really low-production month. January-March is the big kidding season. All summer, there is a lot of milk and a lot of product,” Swift says.

“Business is lower in the summer because so many people leave during the heat,” she adds. “We’re looking at aged, hard cheeses for when the snowbirds are back. We get a lot of requests for Cheddar and things you can grate and melt.”

Fiore di Capra sells most of its cheese at farmers’ markets as well as to local chefs.

“There are quite a few restaurants that buy,” Swift says. “We’ve seen an increase in chefs looking for cheese, who want local products. They’re very supportive of small farms.”

• Arizona advantage

Swift and Murfield both note that the state is great to work with when it comes to regulations and oversight. When it first opened in 2006, Fiore di Capra was the only Grade A goat dairy licensed and inspected by the Arizona Department of Agriculture.

“They’ve been great for us,” Swift says. “There aren’t really any programs for goats, but they’ve been very easy to work with. We’re very lucky to have the Arizona Department of Agriculture doing all our licensing and inspections. Of course we do what they ask, but they’ve been easy to work with.”

Murfield says the No. 1 challenge for Arizona’s dairy industry is immigration and workforce issues. Also, Arizona’s proximity to Mexico provides both advantages and disadvantages, with particular challenges now as Mexico has imposed retaliatory tariffs on U.S. cheeses, and the North American Free Trade Agreement (NAFTA) is under renegotiation.

“NAFTA, with Mexico, is a huge concern with us,” Murfield says. “Being so close to Mexico, and it’s our largest customer.”

Another potential challenge dairy producers face is water supply. Water levels of Lake Mead, used to determine shortages and water allocation to Arizona and other areas supplied by the Colorado River, are at near record lows.

“Water hasn’t been as much a concern as it’s getting to be now because of Lake Mead getting to be so very low,” Murfield says. “If they shut down the irrigation of water to our producers, we’re very concerned. When you live in the desert, that’s always in the back of your mind.”

As for positives, in addition to cooperation with state ag officials, Murfield says Arizona farmers’ ability to raise their own crops is another advantage in the state. And as milk production in Arizona continues to increase, the co-op is always looking for new customers.

“Because of great conditions and good milk quality, I think we will continue to draw customers to Arizona that want to have a location in the West,” he says.

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