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Darigold breaks ground on new production facility in Washington

13 September 2022

The $600 million facility will open in early 2024

Darigold, Inc. hosted a commemorative groundbreaking ceremony last week at the site of its future Pasco production facility. The $600 million facility is slated to open in early 2024 and will process approximately 8 million pounds of milk per day when fully operational from more than 100 dairy farms in surrounding communities.

"The Pasco project represents our third major capital investment in as many years, the largest investment in our co-op's 104-year-history, and a significant step in an ongoing strategy to expand and modernize Darigold," said Joe Coote, the co-op's chief executive officer. "We are a beloved heritage brand with deep roots in Washington and around the Pacific Northwest, but there's still considerable opportunity for us to leverage industry growth – here at home and around the world – to become a top-tier global dairy producer. This facility will play an important role in helping us achieve that vision."

The Pasco facility will be outfitted with two specialized milk dryers and two packaging lines for powdered milk products (or what the dairy industry calls "premium proteins"), two butter churns, two bulk butter packaging lines (for commercial and institutional customers), and five consumer butter packaging lines.

When fully operational, the facility will have the capacity to produce some 175 million pounds of butter per year, and nearly 280 million pounds of powdered milk products annually, including products that meet the highest industry specifications for use in the most sensitive applications such as infant formula. The facility's proximity to rail lines and global shipping ports will help the co-op realize transportation efficiencies for products going to both domestic and global customers.

"The growth of the dairy sector both domestically and internationally presents an opportunity for our dairy farmers," explained Allan Huttema, chairman of Darigold's board of directors and operator of Almar Dairy in Parma, Idaho. "Dairy farmers in the Pacific Northwest have a unique opportunity to benefit from global demand for dairy, which is rising considerably faster than it is domestically. This region is ideally suited to producing high-quality, nutritious dairy and our proximity to global shipping infrastructure makes it more efficient to access international markets."

According to the United States Department of Agriculture (USDA), demand for dairy grew at 1.6% in 2021 in the US, while demand for dairy exports rose by 19%. Very few countries have excess production capacity, giving US dairy producers a unique opportunity to benefit from growing global demand.

In addition to adding capacity to Darigold's overall production capability, the new Pasco facility will incorporate a variety of innovative technologies and conservation strategies that combined could mitigate more than 300,000 metric tons of CO2 emissions per year.

The milk dryers in the new facility will include state-of-the-art dryer burner technology that significantly reduce nitrogen oxide emissions. Use of this dryer burner technology will reduce the facility's nitrogen oxide emissions to make it one of the lowest NOx emitting milk dryer facilities in the state. The co-op is also in talks with the City of Pasco for the planned expansion of its Process Water Reuse Facility (PWRF). The expanded PWRF will treat agriculture related wastewater from local food processors using a set of anaerobic digesters, which will generate renewable natural gas (cleaned from methane) for sale in the West Coast renewable natural gas (RNG) market.

Beyond design features that support the advancement of Darigold's environmental, social and governance (ESG) commitment, the facility's location within the multimodal Port of Pasco on the Columbia River gives it access to both rail and barge facilities, creating transportation efficiencies for the co-op.

"The dairy industry continues to be a key driver of the region's agricultural sector," said Coote. "By adding capacity through this facility, we stand to share the bounty of Northwest dairy with more consumers at home and around the globe, and build more value for the family farmers who own our co-op. That's something that should be easy for all of us in the PNW to stand behind."

Darigold expects the Pasco facility to be operational by early 2024, and plans to hire some 200 employees.



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