Fallon DFA milk plant reaches halfway mark

Construction of the dry milk processing plant in Fallon is more than halfway complete and efforts to build up the local infrastructure needed to support the facility are underway.

The Dairy Farmers of America plant is on track to open in December, five months later than originally planned after the start of construction was postponed a couple months and December weather and minor glitches delayed it some more.

“The project is going well,” says Wesley Clark, DFA’s plant manager who is overseeing the build out of the 90,000-square-foot facility in Fallon’s New River Industrial Park.

Last week concrete was being poured on a 62-foot deck and underground plumbing was going in. Clark says walls are up in the bays and utility room, where the boilers are already installed, and the milk, cream and water silos are all in place.

“The project has been approved for $85 million and right now we’re under budget, but there’s always potential to go over and we won’t know that until the end,” says Clark.

The plant is designed by E.A. Bonelli + Associates Inc. of Oakland, and the general contractor is Big-D Construction Corp. out of Salt Lake City. Many of the subcontractors are local, including Martin Iron Works Inc., a steel fabricator in Reno. GEA Process Engineering Inc. of Hudson, Wisc., is supplying the milk processing equipment such as the plant’s dryers.

About 100 people are currently working at the site, including eight office staff, four from DFA. The cooperative has already hired a controller and managers for maintenance and quality assurance, and posted another eight jobs at the DFA web site, www.dfamilk.com. The plant is expected to employ about 45 workers when it’s fully operational, says Clark.

The project has worked closely with the city of Fallon to expedite permitting and with Churchill County, which built the bridge to provide truck access to the site.

DFA and local entities, as well as state officials, are working to beef up the regional dairy industry so it can deliver the 1.5 to 2 million pounds of milk the plant will be capable of processing every day. Like the construction, that may take a longer than DFA anticipated.

“Generally, it’s what we expected. It will take two to three years,” before the plant is working at full capacity, says Gary Stueve, vice president of operations for the western area for DFA. “We would like it to be quicker, but the dairy economy took a significant hit in the second half of 2012 and start of this year.”

According to Lynn Hettrick, the executive director of the Nevada Dairy Commission, there are milk surpluses in the west, in California and Idaho, despite the new Chobani yogurt plant in Twin Falls. So dairies here are struggling and understandably reluctant to expand until the plant actually comes on line.

“It’s one of the most perplexing parts of the process,” says Eric Grimes, executive director of the Churchill Economic Development Authority in Fallon. “We need to ramp up our herds but there’s no immediate market for that. We’re well on our way to increasing our herd sizes, but it has to be done strategically.”

As many as 20,000 cows need to be added locally for the dry milk processing plant to run at capacity. DFA’s Stueve says two of the cooperative’s local members are remodeling to increase their output and a new dairy in Smith Valley that is now in the permitting process would add about 3,000 cows in 2014.

In addition, the A&A dairy recently went on the auction block and was purchased for $2.3 million by Robert and James Pellandini, dairy farmers from California, who also bought a couple local alfalfa farms to supply the dairy. That dairy will add about 1,500 cows, Stueve predicts.

DFA and others continue to promote the plant at trade shows and through tours in hopes of encouraging existing dairies to ramp up and attracting new dairies to supply it.

“There is a lot of interest,” says Stueve. “And we’re going work at it hard to get it.”