Dairy Processing Feasibility Study
Phase 1 Shows Small Fresh Cheese Plant Focused on Proper Market Could Prove Profitable
A recently completed feasibility study indicates a Dairy Processing Plant focused on the specialty cheese market could show a profit and provide a premium to the dairy farmers whose cows will provide the raw materials.
Shepstone Management, a Honesdale-based consulting firm, conducted the USDA Rural Development Grant-funded study to evaluate the concept. It found that focusing on the New York metropolitan market, where cheese spending is twice that of the US average, and Hispanic cheeses like Queso Blanco and Queso Fresco that have seen significant growth in per capita consumption over the past 20 years, would make a project viable.
The relatively small plant, proposed at 12,000 square feet, would have the capacity to support eight 75-cow herds, pay dairy farmers a $2 premium per hundredweight of milk and directly employ approximately 10 people. The study also offered a preliminary assessment of the necessary equipment.
As proposed, the plant would operate at a deficit for the first two years, but the projected $3 million price tag includes working capital to cover the negative cash flow. There are also opportunities for grants to help offset the costs of equipment and other aspects of the project.
“I am by no means suggesting the county go into the cheese business,” Consultant Tom Shepstone said in presenting his findings to the Commissioners on August 13. The study suggests a public-private partnership for the development of the project and looked at possibly locating the would-be plant on the county farm in Berlin Township, where the county could offer an incentive on the leasing costs.
Wayne County Commissioner Chairman Brian Smith said, “I would like to see a plant that would take milk from all Northeast Pennsylvania counties, but this is something we can do, and we can build on.” If fully realized, the plant could be producing more than one million pounds of cheese for market each year.
The county has budgeted for phase two of the study, which will include a business plan, additional industry and marketing research and site assessment, and the Commissioners agreed to move forward with the planning process.
The Wayne County Dairy Processing Feasibility study is available online at www.WayneCountyPA.gov or by going to: http://www.shepstone.net/WayneCountyDairyFeasibilityStudy.pdf