PERHAM, MINNESOTA – Rural Development Partners (RDP) was pleased to award Bongards Creameries $20 million in New Markets Tax Credit financing for equipment toward the expansion of their cheese and whey processing facility in Perham, Minnesota. The funding will allow Bongards to increase production capacity, improve efficiency & quality, and increase milk purchases while improving outcomes for regional farmers. The project is expected to create/retain 165 good paying quality jobs, and stimulate 389 indirect jobs that support operations. RDP’s allocation is part of an $81 million total NMTC package for the 250,000 SF expansion; partnering with Mascoma Community Development ($20MM), Waveland Community Development ($17.5MM), National New Markets Fund ($17.5MM), and DV Community Investment ($6MM).
“RDP is honored to help Bongards expand its operations in Perham. The added capacity will allow them to continue to service their existing members while bringing on additional patrons. Bongards has always paid a premium to their members which is vital to the long-term viability of family farms in Minnesota.” – Dan Helgeson, CEO of RDP
While the dairy industry has grown by 4.5% nationally over five years, Minnesota growth remained relatively unchanged. Nearly 4 of every 10 family dairy farms have disappeared in the last five years as small farms struggle to compete with larger corporate operations. Bongards’ expansion will allow growth by almost one-third of their current production, from 4.1 million pounds per day to 5.4 million pounds at a time the region suffered the loss of a Creamery just 3 hours from the Perham facility, leaving 40 Minnesota and Wisconsin dairy farms without buyers for their milk. 98% of Bongards’ 267 farm co-op members are family-farms, of which one underscored the importance of Bongards expansion to their family’s farming operations.
The facility upgrades bring the facility up to modern standards that allow Bongards Creameries the ability to maintain its strong position in the global cheese suppliers industry. The Project is part of a multi-year $185 million investment to modernize the facility. Recent investments include new vats, evaporator upgrades, milk intake process upgrades, cheese expansion, whey expansion, and cooling system upgrades, along with other minor building upgrades. The remaining investment will focus on the drying process of the facility with the purchase and installation of a new DPW dryer, powder packaging and handling equipment and wastewater expansion. With the expansion of the facility and new equipment, the milk intake capabilities will increase and result in more opportunity for member farms who provide milk for its cheese and whey products. With the facility expansion and increased milk intake, Bongards will increase its purchase from the 267 member farmers, of which 98% are family farms. By increasing the facility’s milk intake by 1.4 million pounds per day, they will increase the annual payments to members for milk shipments further catalyzing investments into the rural, low-income community.
“The New Markets Tax Credit program has been and continues to be instrumental in our ability to continue to provide the maximum value for the milk of our members, while ensuring we are building a cooperative that will be here for future generations. The Community Development Entities that partner with us understand the need to support our farmers and building for the future. They are wonderful partners in our mission of long-term success and service to our farmer owners.” – Chris Freeman, CFO of Bongards
