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Big cheese, efficient farms support dairy in New Mexico

Editor’s note: In 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 — New Mexico.

By Rena Archwamety

MADISON, Wis. — New Mexico, with its arid climate and ample cheese processing, supports a strong dairy industry that ranks in the top 10 for both milk output and cheese production in the United States. The state has 135 permitted dairy farms and 14 permitted dairy processing facilities, including major plants owned by Glanbia, Leprino Foods, Saputo and Dairy Farmers of America (DFA).

“We’re No. 9 in milk production, No. 5 in cheese production, and also No. 1 in efficiency, meaning the lowest carbon footprint as we recycle nutrients and water several times over,” says Beverly Idsigna, executive director, Dairy Producers of New Mexico (DPNM).

While cows do well in New Mexico’s dry heat, water availability is a constant issue, and dairy farms have adopted conservation practices out of necessity. Idsigna says DPNM has worked with the state government to establish the Dairy Rule, legislation passed five years ago that helps dairy farms anticipate what to expect when it comes to groundwater regulations.

“Right now, we probably have the most stringent regulations in the country for groundwater,” Idsigna says. “Our producers are some of the most innovative and resilient. Through the farm labor crises and low milk prices, they learn to adapt and keep going. We’re recycling all our water and putting nutrients back on the fields. They’re doing a good job keeping viable and producing some of the most nutrient-rich dairy products in the world.”

• Big dairies, big cheese

New Mexico’s cow-friendly climate allows for large, efficient dairy farms that over the years have consolidated and continued to expand in cow numbers. Robert Hagevoort, extension dairy specialist and professor at New Mexico State University (NMSU), estimates the state’s average herd size is around 2,500, with the smaller herds still reaching 1,000-1,500 head.

“A lot of large dairies came into New Mexico in the ’90s and early 2000s, most of those coming in from places like California,” Hagevoort says. “The last couple of years of financial difficulty, I don’t think we’ve lost lots of dairies, or at least any cows. We do see consolidation, the same number of cows owned by fewer people. ... We continue to produce more milk. Producers are becoming better at what they do.”

The stability in dairy production is supported by several major processors in the area. In Clovis, New Mexico, Southwest Cheese, a joint venture between Glanbia, DFA and Select Milk, is the world’s largest cheese factory under one roof. Leprino Foods owns a large Mozzarella plant in Roswell, New Mexico, and a major Hilmar Cheese plant is located just across the eastern New Mexico border in Dalhart, Texas. F&A Cheese, owned by Saputo, is in Las Cruces, New Mexico, and Tucumcari Mountain Cheese, a Feta and specialty cheese processor, has been expanding in Tucumcari, New Mexico.

“The milk here is primarily produced for cheese,” Hagevoort says. “There are some fluid contracts in bigger cities around here like Dallas, Houston and San Antonio, but the majority of milk will be for cheese.”

Finding adequate labor on New Mexico’s dairy farms can be a challenge. NMSU has developed audio and video training materials in English, Spanish and K’iche’ to help dairies provide safety and animal training. NMSU also offers a minor in dairy and a summer program that allows students from across the country to experience working with local large-scale dairy operations.

Idsigna notes that the dairy industry is one of the largest private employers in New Mexico, providing both direct and indirect employment. In addition to local and state issues, DPNM advocates on behalf of the state’s dairy industry in support of national legislation like the Farm Workforce Modernization Act and applauded the passage of the U.S.-Mexico-Canada Agreement (USMCA), as much of the dairy processed in New Mexico is exported across its southern border.

• Joint success

Southwest Cheese, the joint venture between Glanbia and the milk member Greater Southwest Agency, which includes DFA and Select Milk, opened in 2006 initially processing 7 million pounds of milk a day. Since then, the plant has undergone two significant expansions and now processes more than 14 million pounds a day.

Each year Southwest Cheese, which employs around 450 people, produces more than 500 million pounds of block cheese and 35 million pounds of value-added whey protein powders.

“It’s a great business model that allows both parties to do what they do very well. The milk member’s primary role is milk procurement, assuring enough milk for the facility, and Glanbia handles manufacturing, sales and research and development,” says George Chappell, president of Southwest Cheese and vice president of dairy operations, Glanbia Nutritionals.

Before Southwest Cheese opened, Ireland-based Glanbia had three cheese manufacturing facilities in Idaho and was looking to grow its U.S. footprint. Eastern New Mexico was an ideal location due to the available and expanding milk production in the region.

“The combination of a partner that had a growing milk supply, the milkshed in the region and a need for processing in that region, and Glanbia’s desire to grow, fueled the partnership,” Chappell says. “The milk supply has continued to grow and has really fueled our expansion growth. With each expansion, there was additional milk supply and growing demand for our products. It was a natural fit to grow as both of those happened simultaneously.”

Southwest Cheese provides American-style block cheese to businesses that further process it for ready-to-eat retail or foodservice applications, as well as whey protein for ingredient applications and liquid permeate for animal feed. In recent years, the facility has processed more value-added varieties of both cheese and whey.

The New Mexico location also allows Southwest Cheese to conveniently supply into the Mexican market, and the company exports about 15% of its products internationally.

“We partner closely with our customers’ needs both in U.S. and international markets,” Chappell says. “We’re constantly looking for ways to grow the business in terms of volume as well as value. In 2019 we commissioned a volume expansion, and now we are looking for value propositions, taking new products up in the value chain.”

As a major employer and representative of the dairy industry, Chappell notes that Southwest Cheese works closely with local communities and state governing bodies, often welcoming and meeting with business representatives and state officials.

“About 5,400 direct jobs are linked to dairy in New Mexico. Roughly $194 million in direct wages are linked to those jobs, and $1.5 billion direct output goes back to the state,” Chappell says. “The plant itself is significant in its own right, but when you look at it as a whole — overall jobs and agriculture supporting those rural communities — we have a strong place in the top three or four job suppliers in that area. We try to make sure we have a good relationship with all key stakeholders.”

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