Arla and Dairy Farmers of America (DFA) have agreed to enter into a joint venture that includes the construction of a small dairy plant in the US for cheddar cheese production.
In their first collaboration ever, the two farmer-owned cooperatives plan to explore opportunities to build premium-quality standards in the cheddar category, in the world’s biggest cheese market.
A third of the cheese bought by American consumers is cheddar cheese. However, very few brands currently on offer in the US produce cheddar using the highest milk quality available, without growth hormones or artificial ingredients.
“Together with Dairy Farmers of America and eight of their farmers, who will supply the raw milk, we will explore the opportunities in building premium quality standards into the cheddar category through the Arla brand.
“Adding cheddar to our US portfolio will make us more attractive to the retailers and help increase the sales of our European products made from owner milk,” said Peder Tuborgh, CEO of Arla Foods.
“We are pleased to be entering into this partnership with Arla. Arla and DFA share the same passion for providing the highest quality products to consumers and are committed to sourcing these products from dairy farmers who employ sustainable and transparent farm practices,” said Rick Smith, President and CEO of DFA.
Part of the joint venture agreement is the construction of a production site in the western part of New York State, where the eight farms supplying the raw milk are placed. The farmers are members of DFA and will supply approximately 70,000 tons of raw milk annually.
The US market has a restricted import quota system for cheddar, which is why Arla’s possibilities for importing European cheddar are limited and a local production based on American milk is a better solution. The joint investment is $58m (€53m) of which Arla covers 20 per cent or $11.6m (€10.3m).
Source – The Diary Site