Capital spending survey

Dairy Foods,  June, 1998  by Jack Mans

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Cold storage is a hot item for companies responding to Dairy Foods' annual capital spending survey.

Nearly a third of the companies in the survey listed cooler and/or warehousing projects in 1997 or planned for 1998.

Projects range from basic coolers with in-floor conveyors or pallet racks served by fork trucks to state-of-the-art automated warehouses. In the latter category, Santee Dairy, City of Industry, Calif., and Darigold, Sunnyside, Wash., have installed two of the most sophisticated systems in the dairy industry. Both are totally automated palletless systems that handle cartons of product directly.

New plant construction has tapered off from last year, when the 1997 Capital Spending Survey predicted a whopping 34% increase in capital projects. Nevertheless, the dairies reporting both 1997 and 1998 figures in this year's survey (see chart on next page) indicate an 8.5% increase in capital spending this year. More than $472 million in capital projects have been identified by this survey.

COMPANY                            SPENDING
                                 ($ MILLIONS)

                                1998      1997

Agri-Mark(1)                     5.0       5.0
Methuen, Mass.

Agropur                         20.0      25.0
Granby, Quebec

Alto Dairy                       2.5       2.0
Waupun, Wis.

Associated Milk Producers        9.5       9.0
Arlington, Texas

Anderson Erickson                6.0       5.0
Des Moines, Iowa

Astro                            8.5       5.0
Etobicoke, Ontario

Avonmore West                    3.5      26.0
Twin Falls, Idaho

Ben & Jerry's                    9.0       5.2
South Burlington, Vt.

BolsWessanen                    21.3      14.6
St. Augustine, Fla.

Bongards Creameries              2.5       3.5
Norwood, Minn.

Broughton Foods                   NA       2.0
Marietta, ohio

Calif. Gold Dairy Products       2.2       1.5
Petaluma, Calif.

Cass-Clay Creamery              0.75       0.5
Fargo, N.D.

Dairymen's Coop. Creamery       12.7       6.0
Tulare, Calif.

Darigold(1)                     17.5      25.5
Seattle, Wash.

Dean Foods(1,2)                 92.0      51.0
Franklin Park, Ill.

Deseret Dairy                   0.25       9.0
Salt Lake City, Utah

First District Assn.             2.0       8.5
Litchfield, Minn.

Foremost Farms USA              22.5      21.8
Baraboo, Wis.

Great Lakes Cheese                NA       7.0
Newbury, Ohio

Land O'Lakes                   150.0     145.0
Arden Hills, Minn.

Michigan Milk Producers          2.4       1.2
Novi, Mich.

Perry's Ice Cream                0.6       2.3
Akron, N.Y.

Prairie Farms Dairy(1)          17.0       8.5
Carlinville, Ill.

Robinson Dairy                   1.5       5.5
Denver, Colo.

San Joaquin Valley               3.0       6.0
Los Banos, Calif.

Saputo Group                    11.1       4.3
St. Leonard, quebec

Smith Dairy Products             3.0       3.0
Orrville, Ohio

Suiza Foods                       NA      52.6
Dallas, texas

Swiss Valley Farms              12.0       3.3
Davenport, Iowa

Tillamook County Creamery        3.5       1.8
Tillamook, Ore.

Turkey Hill Dairy                2.6       3.7
Conestoga, Pa.

Tuscan/Lehigh Dairies(1)         3.0       3.0
Lansdale, Pa.

Upstate Farms                    4.0       4.0
LeRoy, N.Y.

Wells Dairy                     15.0      13.0
LeMars, Iowa

West Lynn Creamery               6.0       6.8
Lynn, Mass.

1. FISCAL YEAR DIFFERS FROM CALENDAR YEAR. 2. DAIRY SPENDING ONLY.

Many of the new plants reported last year are now up and running. The two largest new plants, Santee Dairy and Berkeley Farms, Hayward, Calif., are nearing completion and should be in operation by the time you read this.

Neither of these companies was willing to participate in Dairy Foods' capital spending survey so they are not included in the chart. However, based on information from last year's capital spending survey, Santee Dairies will spend $70 million for its 250,000-sq-ft fluid plant in City of Industry. That plant will initially run 3 million lb of milk per day on 10 packaging lines, and will have the ultimate capacity of 5 million lb per day.

Berkeley Farms is working on a $60 million, 220,000-sq-ft plant in Hayward that will run 2 million lb of fluid milk per day and add ice cream production later this year.

Overall, the 8.5% increase in capital spending reported by the companies in our survey is a far cry from the 34% increase in last year's spending over 1996. However, much of this drop can be attributed to the completion of the Santee and Berkley Farms projects.

The accompanying chart lists spending by all of the companies in the survey along with major projects. More detailed descriptions are included in the following capsule comments.

Anderson Erickson Dairy Des Moines, Iowa

1997: $4.5 million to expand main plant and relocate soft-serve operation from remote location to main plant and add more equipment. $500,000 for new receiving room that allows four tankers to be unloaded at a time.