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Illinois’ central location, milk supply good for dairy business

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 — Illinois.

By Rena Archwamety

MADISON, Wis. — Illinois is home to 630 dairy farms — 562 of which are Grade A — and 35 dairy processing plants. The state’s central location, ideal landscape for raising cows and crops, and proximity to population centers make it a good place for both dairy farming and processing, according to those in the industry.

Kilgus Farmstead in Fairbury, Illinois, is a farmstead milk processor with 150 Jersey cows, slightly more than the typical 120-cow average herd size in the state. Like most of the state’s dairy farms it is family owned, with four families running the operation.

“We started processing about 10 years ago as a way to bring the next generation back to the family farm,” says Jenna Kilgus, one of the farm’s owners.

She notes that in the last five years, her family’s business has seen a large increase in demand for local milk from coffeehouses as well as higher-end restaurants.

“We’re 100 miles form Chicago, and being within that 100-mile radius of that big a city has definitely helped us,” Kilgus says, adding that all of their milk is distributed within Illinois. “Probably about 40 percent of the milk goes to Chicago and the rest stays downstate in Bloomington, Champaign, Peoria and those areas.”

In addition to the demand for local product, Kilgus says Illinois is a good place to raise cows and grow feed.

“Over 90 percent of the food our cows eat we grow ourselves,” she says. “We’re able to pasture graze cows in the spring, summer and fall months.”

For dairy farms that don’t process their own milk, there are plenty of processing facilities in the state.

“Some, depending on the area, could move into the Wisconsin side, but 85-90 percent of the milk raised here in Illinois goes to Illinois processors and co-ops.

Most of the milk we produce here is used for fluid milk, though there is some cheese production,” says Tasha Bunting, manager of the Illinois Milk Producers’ Association.

Illinois Milk Producers’ Association is a resource managed by the Illinois Farm Bureau that advocates for the state’s dairy industry interests. It is a federation of the major dairy cooperatives in Illinois (Foremost Farms USA, Dairy Farmers of America, Mid-West Dairymen’s Co. and Prairie Farms), as well as independent dairy producers, allied industry members and universities.

“We host educational and training events,” Bunting says, giving examples such as dairy summits that feature various dairy management tools and technologies, summer dairy farm tours and training seminars for farmers. “Recently we partnered with an insurance group that will provide dairy revenue protection insurance.”

• Major processors

Prairie Farms is the largest co-op in Illinois, marketing around 60 percent of the milk produced in the state.

Approximately 288 of the cooperative’s 850 dairy farmers are located in Illinois. Headquartered in Edwardsville, Illinois, Prairie Farms operates 21 plants across the state that make fluid milk, cheese and ice cream. It also has a joint venture plant with Muller-Pinehurst Dairy in Rockford, Illinois; a GMS Transportation subsidiary in Granite City, Illinois; and several distribution centers across the state. This year Prairie Farms celebrated its 80th anniversary.

“Illinois is an ideal location for Prairie Farms because it is home to so many of our dairy farmers and processing plants,” says Darin Copeland, public relations manager, Prairie Farms Dairy Inc.

“Geographically speaking, Illinois is centralized within our territory that primarily serves the Midwest. From a workforce perspective, Illinois offers a qualified pool of farmers and workers that we need for success in the dairy business.”

Brewster Cheese Co., another Illinois Milk Producers’ Association member and the largest Swiss manufacturer in the United States, has a production plant in Stockton, Illinois, that processes close to 45 million pounds of cheese a year as well as liquid whey.

The Ohio-based company purchased the former Kraft plant in Illinois in 1998 and has two other plants in Ohio and Idaho.

“We were looking to increase our footprint in the cheese business, and that plant had become available,” says Mike Walpole, national sales manager, Brewster Cheese. “We are the biggest employer in Stockton, which is a very small town, but at one time was a bigger manufacturing center. We are glad we can stay in this area and contribute commerce to the community.”

Walpole notes that the milk supply in the region, as well as its proximity to many of its wholesale customers, made Illinois an ideal location for the cheese plant, which takes in about 35 million pounds of milk each month from roughly 200 dairy farmers in Illinois and surrounding states. The plant has undergone a number of upgrades in recent years.

“The last five years have been nothing but major renovations,” Walpole says. “New cheese vats, whey operations, updated utilities, a new cold storage facility ... quite a bit of work, all required to stay competitive.”

• Challenging conditions

Like many other regions in the United States, Illinois is experiencing a decline in the number of dairy farms and cows, compounded by the challenges of low milk prices. According to the latest USDA milk production data, there were 89,000 milk cows in Illinois in November 2018, down 4,000 head from a year earlier.

Bunting says with the current low milk prices, many of Illinois’ smaller producers are deciding it’s time to retire as they’re not finding the same opportunities there used to be in dairy.

“A lot of dairy farmers are anxious with this lull in milk prices to start seeing an uptick,” she says. “Thankfully, new tools available through the farm bill and the dairy revenue protection launched this fall will keep them going, and hopefully keep them in it for the long run.”

Some farms in the state are finding ways to stay afloat and remain flexible to current market conditions and changing trends in demand.

“Unfortunately you don’t see the dairy industry growing in Illinois,” Kilgus says, noting that her family’s farm and milk business has found ways to adjust and diversify to react to changing markets and demand.

For example, it has started selling meat as well as milk to its customers who are looking for local products.

“I think the industry is constantly changing,” she adds.

“When we first started bottling 10 years ago, our main focus was selling at grocery stores and retailers. Five years ago, that shifted to coffeehouses. It keeps shifting and changing. We always have to keep our blinders off and be on the lookout for what’s going to happen in the future.”

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