Davisco, Land O'Lakes eye cheese plant pact

Top U.S. whey byproduct manufacturer Davisco Foods International and king-sized co-op Land O'Lakes are eyeing the possibility of teaming up to build what company leaders are calling a "large-scale, world-class" cheesemaking plant.

The potential project is being considered for a South Dakota location, executives said, with a feasibility study kicking off Sept. 20.

"Davisco and Land O'Lakes believe that South Dakota and the surrounding region have the potential to achieve and sustain a competitive position in the dairy marketplace ... in terms of both production and processing," Davisco President Mark Davis said this week.

Land O'Lakes leaders are touting the plant as a potentially benefiting the area's dairy producers.

"We are at a point where critical mass and economies of scale are vital to dairy industry success, the proposed partnership and plant project address those issues," said Land O'Lakes Dairy Foods Industrial Group COO Jack Prince.

Davisco and LOL executives say a "critical element" in the feasibility study will be determining if South Dakota officials support the companies' plans.

"This project would represent a significant long-term commitment for both Davisco and Land O'Lakes," Davis said. "Before going forward, it will be important to ensure South Dakota's leadership at every level is equally committed to revitalizing the region's core dairy industry."

Privately held, Le Sueur, MN-based Davisco runs a whey-manufacturing site in Lake Norden, SD, while LOL operates a Volga, SD-based cheesemaking facility.

Arden Hills, MN-based Land O'Lakes earlier this year sold its $310 million fluid dairy operations to No. 2 U.S. dairy processor Dean Foods Co. and also inked a marketing/licensing deal with the Franklin Park, IL-based concern. The agreements feature long-term licensing agreements for using the Land O'Lakes brand name. (See related article.)

Davisco produces more than 600,000 lb. of cheese daily and is one of the largest suppliers of the product to Kraft Foods.

Edited by Gerry Clark
Managing Editor, Dairy Network