The decision to rebuild a dairy processing plant in Minnesota would not have been possible without New Markets Tax Credits from Rural Development Partners.
This particular plant was 100% owned by a cooperative of more than 5,000 rural residents, many of whom reside in LICs across seven states. The plant acquired milk from dairy farmers in Minnesota, Iowa, and North and South Dakota. These producers lost their primary milk market, resulting in hundreds of farm workers’ jobs lost. More than 130 employees lost their jobs at the plant. Insurance proceeds weren’t sufficient to create the type of state-of-the-art plant that was needed to remain competitive.
When RDP met with management, consideration was being given to closing the site permanently or to constructing a smaller plant in another state. The company was unsuccessful in attempting to solicit capital from the public sector and traditional lenders were reluctant to increase their exposure given the recent operating performance. Cooperative members had no capital to contribute since they had also experienced farm production losses due to the downturn in the dairy sector.
The new loans allowed the plant to rebuild, retaining more than 130 jobs for the community and ensuring that dairy farmers would have a sufficient market for their product. In addition to preserving a large number of high paying jobs for the region and a major milk market, we increased the wealth of over 5,000 residents who own this facility. The plant now pumps over $30MM into the regional economy each year.
