Valley Queen Cheese in Milbank announced recently that it plans to spend $195 million in a three-year expansion that provides a major economic boost to northeastern South Dakota.
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Brad Johnson

Combined with a recent $250 million expansion by Agropur at its cheese plant in Lake Norden, South Dakota now is a major player in the national cheese market.

Set for groundbreaking in late May, Valley Queen’s expanded plant will be operational by January 2025. The project will allow the company to produce another 125 million pounds of cheese annually, bringing total production up to nearly 325 million pounds.

Valley Queen said its existing operation requires milk from 82,000 cows from 42 farms within 90 miles of Milbank.

The company plans to hire 140 employees over three years to fully staff the expanded operation, a Valley Queen news release reads.

“In addition to a growing workforce, the project will also support considerable growth in dairy along the I-29 corridor. An estimated 30,000 cows will be added to the region over the next three years across existing herds and some yet to be established,” per the release.

When complete, Valley Queen will employ about 440 people.

More than 400 people also are working at Agropur’s cheese factory in Lake Norden. Slightly larger than the expanded Valley Queen will be, Agropur’s expansion tripled its capacity to about 365 million pounds of cheese and another 180 million pounds of whey powder. That expansion required the milk output from about 85,000 more cows.

Locating nearly 115,000 more cows in the Interstate 29 corridor will have a major economic impact on the entire region. Agropur’s expansion was estimated to have a $1 billion economic impact.

Already Lake Norden is seeing the benefits. Several new apartment buildings have been built, and a new three-story building housing apartments, offices and retail is going up on the town’s Main Street.

It is the type of development rarely seen in small towns in South Dakota, which mostly are losing residents. In less than 10 years, Lake Norden has added nearly 60 residents. A recent housing study showed that the town’s median income doubled from $31,000 to $62,000 in 2018.

Agropur says its employees arrive daily from 30 different communities. Less than 10 minutes west toward Bryant, Riverview opened the 9,500-head Garfield Dairy, the largest single-site dairy farm in South Dakota.

Drumgoon Dairy, which started with 1,400 cows near Lake Poinsett, now has grown to 5,500.

Valley Queen’s expansion is welcome news in Milbank, which has lost population during the past 20 years. The expansion will reignite the city’s real estate market as demand for more housing increases, as well as support commercial services.

Both Valley Queen and Agropur will require more dairies to be located in the region. Presently, Minnehaha, Grant, Hamlin and Brookings counties host the most dairies. Access to transportation is important.

Building a new 5,000-head dairy generates about $40 million in sales activity. Operating that facility supports an estimated 125 jobs annually, according to a report prepared for the South Dakota Department of Agriculture.

The equivalent of six such facilities is needed to support Valley Queen’s expansion. Correspondingly the demand for feed, forage and other support products and services will drive job growth.

While the expansions are good news, the lack of area housing and employees will be a problem. Both cheese factories already struggle to fill open jobs and dairy farms creatively find workers. The construction industry, struggling to keep pace, faces worker shortages for laborers, skilled carpenters, concrete, plumbing and electrical.

The solution seems obvious – make it possible for immigrants to live and work legally in the country. It ought to be the top priority for our congressional delegation. Private industry is doing its part to build a stronger economy, but standing in the way are politicians more interested in self preservation than solving problems.

If they did more than simply show up for groundbreaking ceremonies, more people would have jobs, houses and better futures and more small towns would be growing.

Fortunately, there are companies like Valley Queen and Agropur willing to make rural South Dakota stronger.

Brad Johnson is a Watertown journalist and businessman who is active in state and local affairs.

At the midpoint of the year, the all-milk price forecast for 2022 is a whopping $26.20 per hundredweight (cwt), according to the June 2022 USDA/ERS Livestock, Dairy and Poultry Outlook report.

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