The Dairy Industry in Dumas & Moore County, Texas

The Dumas EDC has aggressively targeted businesses involved in the dairy industry. With companies such as Nelson-Jameson, Integrated Dairy Herd Testing and Prime Metal Components locating in Dumas to support the industry, we feel confident that more firms will follow. What makes our community an excellent location for companies seeking dairy opportunities are the addition of Hilmar Cheese, Pacific Cheese, and other large dairy facilities.

The industry took hold as a result of a regional cooperative effort, led by the High Ground of Texas consortium of 60 Counties and Communities. Today, Dumas and Moore County has successfully attracted dairies, suppliers, service firms and contractors involved with the dairy industry. Prospects include new food processing firms that rely on dairy products, trucking firms and manufacturers of dairy equipment. The biggest end users of the dairy products in the local area include Pacific Cheese and Hilmar Cheese.

Hilmar was established in 1984 by eleven dairy families. In just over 20 years the privately owned organization has grown to become the largest single-site cheese and whey products manufacturer in the world, processing over 11 million pounds of milk into more than a million pounds of cheese per day. Under current concerns for doing business in California, Hilmar Cheese set their eyes east to expand and find a new location to build a state-of-the-art facility. This will be the company’s first processing plant outside of its corporate headquarters in California’s Central Valley.

In March 2005 Hilmar Cheese sent out an RFP announcing plans to invest more than $190 million to build a new cheese factory that will employ more than 350 workers once it reaches full production. The High Ground of Texas made communities in the Panhandle aware of Hilmar’s request and immediately went to work pulling the pieces together.

As the major economic hub in the Texas Panhandle, Amarillo takes pride in providing leadership and developing strong relationships with our surrounding communities. Dalhart and Dallam County were named as a finalist and the Amarillo EDC followed with support behind them, bringing key players to the table to win this project. The final stages of competition for the project involved multiple locations around the United States and the following factors favored Dalhart:

• Cost effective milk supply
• Geographical alignment to customers
• Pro-business environment in Texas
• Community receptiveness
• Competitive Incentive Package

In order to win the project, the State of Texas, Dalhart community and the Amarillo EDC
worked together as a team and resourcefully pulled together an incentive package to
overcome the competitive advantage offered by the Idaho site. Our winning Texas proposal included:

• $7.5 million grant from the Texas Enterprise Fund
• More the $20 million in state capital fund grants, infrastructure and Enterprise Zone funding and sales tax exemptions
• $12.2 million in grants, tax credits, and abatements from Dalhart entities
• $5 million grant from the Amarillo EDC

The Hilmar Cheese Company will have a tremendous impact on the Amarillo economy. According to an impact analysis conducted by The Perryman Group, Amarillo will see total expenditures based on the construction impact of the project of nearly $280 million initially and more than $1 billion at build-out. The impact to Amarillo of the operations of the cheese plant and associated dairy operations is projected to be $144 million and 1,100 jobs initially and nearly $570 million and 4,300 jobs at maturity.

The long term benefits are abundant. Hilmar Cheese will begin production with milk from ten new independent dairies totaling 25,000 dairy cattle and will grow to more than 150,000 dairy cattle throughout the next ten years. Employment in the dairies will exceed over 1,500 by the end of the decade. The Perryman Group concluded that the Hilmar facility will serve as an important source of economic growth and help secure the area’s position as a center for food processing. Already Amarillo has several beef processing facilities including Tyson Foods and Palo Duro Meat and are planning for expansion associated with added production from Hilmar Cheese.
As the cheese plant purchases necessary input goods and services ranging from janitorial supplies to banking services and the myriad of other products required for the plant’s operations, other firms in the area will benefit. For construction alone, Hilmar has selected local Amarillo businesses as its general contractor, architect firm and geotechnical engineering firm. The expansion phase will only further diversify the economic base.