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State of the Industry

 

New Mexico’s dairy industry is thriving after growth spurt

By Rena Archwamety

Editor’s note: Beginning this month, we will be taking a look at the cheese and dairy industry across the United States. Each month we will examine a new state or region, looking at key facts and evaluating areas of growth, challenges and recent innovations. We are pleased to introduce our first “State of the Industry” — New Mexico.

MADISON, Wis. — New Mexico might not have a nationwide reputation for its “Cheeseheads” or “Happy Cows,” but it has made a massive leap over the past decade in statewide dairy production that has its farmers, producers and communities smiling.

“It is a very vibrant industry,” says Victor Cabrera, assistant professor and extension and extension dairy specialist, New Mexico State University (NMSU), Las Cruces, N.M. “It very much sprung into action in the past 10 to 20 years.”

The state, whose dairy industry has grown 104 percent in the past 10 years according to the NMSU dairy extension program, has experienced an influx of new dairies. Most were farmers lured from California by New Mexico’s abundant and inexpensive land.

“Dairy producers were attracted by the availability of land,” Cabrera says. “Many came from California where they already had large herds. One incentive was that they were able to sell their dairies in California at a much higher price than they were able to buy them in New Mexico, leaving more money to invest.”

“The growth of the industry was a spurt, an influx in the mid-1990s,” says Sharon Lombardi, executive director, Dairy Producers of New Mexico. “Most came from California. They found a place where land was cheaper and there was a ready-made feed supply.”

As a result of the abundant milk supply from these dairies, cheese production also has grown as large companies have moved into the state. Most recently Glanbia Foods, Dairy Farmers of America and Select Milk Producers formed a joint venture and opened Southwest Cheese Co. in Clovis, N.M., in 2005. At full capacity, the facility is expected to process more than 2.4 billion pounds of milk and produce more than 250 million pounds of cheese and 16.5 million pounds of high value-added whey proteins each year.

“Curry and Roosevelt Counties, which surround Southwest Cheese, are the 15th and 16th highest milk-producing counties in the entire United States,” Southwest Cheese officials say. “A ready supply of milk, a strong workforce and a suitable site made Clovis the ideal new home for Southwest cheese.”

Other key cheese producers include Denver-based Leprino Foods, which purchased a Cheddar plant in Roswell, N.M., from Associated Milk Producers Inc. in 1993 and turned it into a Mozzarella plant, and the Dresser, Wis.-based F & A Dairy Products Inc., which expanded its production in 1995 to include a new Mozzarella and Provolone plant in Las Cruces, N.M.

“At that time there was a lot of milk here but very little cheesemaking,” says Bob Snyder, vice president of New Mexico operations, F & A Dairy Products. “We needed more milk, so we decided to come down and build this plant with the idea that it could expand.”

“We are always looking to locate cheese plants in an area where there is an abundant milk supply, and that certainly is the case in New Mexico, and has been for a long time,” says Mike Reidy, senior vice president of procurement, logistics and business development, Leprino Foods.

“There are good dairying conditions in New Mexico,” Reidy adds, “and that’s why we have seen significant growth year after year in milk production in New Mexico.”

New Mexico now ranks as one of the top 10 states in both milk and cheese production. According to the National Agricultural Statistics Service (NASS), New Mexico produced more than 7.3 billion pounds of milk in 2007, ranking eighth in the nation (down slightly from 7.6 billion pounds and seventh in 2006).

Though the state’s milk production has fallen slightly, its cheese production continues to rise. It ranked sixth in cheese production in 2006, producing nearly 580 million pounds that year. Recently New Mexico has risen to fifth in cheese production, producing more than 50 million pounds a month in both October and November 2007.

And while New Mexico has a relatively small number of dairies — currently about 173 — it boasts the largest number of cows per dairy with an average of 2,088 in 2006.

The dairy industry is an important component of the economy of New Mexico, one of the poorer states in the nation. According to the NMSU dairy extension, the dairy industry has an overall impact of $2.6 billion to the New Mexico economy and generates 17,150 jobs overall in 354 industries.

For this reason, communities are eager to see new dairies arrive.

“In rural New Mexico, there’s not a lot of economic development,” Lombardi says. “A lot of communities recruited dairies, wanted dairies to come in. It’s helped several communities. People want us here, they’re excited about having dairy here.”

In addition to cheap land, New Mexico has other attributes that attract dairy farmers.

“There are several attractive points here,” Cabrera says. “It’s a mild climate. It may get cold, windy at some point, but cows produce well under these conditions. It’s drier, and even though the temperature can be high, humidity is low. You don’t need housing for cows, so it’s cheaper to build a dairy facility.”

There also is ready support for new dairies.

“There is a well-established group of providers around,” Cabrera adds. “They will find what they need handy, and don’t have to bring all the expertise. There also is a pool of people, laborers, who have experience on dairy farms.”

Lombardi says that while New Mexico doesn’t have a milk marketing board, there are a handful of well-organized cooperatives operating in the region — Select Milk Producers, Dairy Farmers of America, Zia Milk Producers and Lone Star Milk Producers — that benefit the state’s producers.

Small-scale and specialty milk and cheese producers also have found New Mexico an accommodating place for business. A number of small farms specializing in goat’s milk products exist in the state, including two new retail raw goat milk producers expected to arrive this spring.

“Because of New Mexico’s large Hispanic population, most communities are familiar with goat milk products,” says Donna Lockridge, co-owner of South Mountain Dairy, a goat farm near Albuquerque, N.M., that specializes in fresh farmstead Chevre and Feta. “While the cheeses may be different from the traditional Queso Blanco that their grandmothers may have made, cheese from goat milk is still a desirable product.”

The growth of the state’s specialty cheese industry, however, could be largely dependent on the state’s economy.

“As people’s expendable income lessens, the willingness to spend money on ‘luxuries’ such as specialty cheeses may diminish,” Lockridge says. “New Mexico is not a rich state. One of the major challenges is offering an affordable product while still maintaining the quality of the product with rising feed and fuel prices.”

The larger New Mexico dairy industry also faces some challenges to growth, according to Cabrera.

“I know the number of cows has decreased in the last months,” he says.

According to NASS, the number of milk cows in New Mexico last month was 339,000, down from 360,000 in December 2006.

Cabrera attributes the decrease partially to a few dairies that have moved, and partially to cows having been taken off the market by Cooperatives Working Together.

“For now I think it won’t grow too much,” he says.

He also cites the new Hilmar Cheese Co. plant in Dalhart, Texas as a source drawing some dairies over the state line.

Lombardi agrees that the New Mexico dairy industry is not growing as much as it has in the past.

“I think we’ve reached capacity. I think there’s a home for all our milk now,” she says. “I think we’ve hit our plateau, and I think we’re going to stay there. But it all depends on the market; you never know.”

Another challenge that the New Mexico dairy industry needs to overcome is its struggle with ever-changing regulations, Lombardi says.

“There needs to be some kind of oversight on regulations,” she says. “Regulators are coming out with some things that are not doing what they are supposed to. We need sound science behind us.”

Lombardi gives an example of dairy farms being required to keep paperwork on how much rain they get each day, though the state usually only experiences 5 to 15 inches of rain a year.

“People who don’t understand agriculture are making rules and regulations about agriculture,” Lombardi says. “They’re not consistent. They change on whims, not on sound science.”

Cabrera says that while regulations are well-intended, they need to be more consistent and accommodating.

“Dairy farmers want to be proactive, but they spend a lot of time doing these things that cost money and time, and they don’t feel they are consistent,” he says. “Once they feel they have done what is requested, new regulations come along.

“I really believe the producers are stewards of the environment, and they try to do as much as they can,” Cabrera adds. “They live on the land, drink the water, breathe the air. It is a bad perception that they only do business and don’t care about the environment.”

Lombardi also gives kudos to the dairy producers in New Mexico.

“I’ve been doing this job for 14 years,” she says, “and I’ve been blessed because I think we have the best producers in the world.”

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