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Dairy, Community Leaders Welcome Senator Thune (2018-05-30)
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Trade, tariffs and the growth of the dairy industry in South Dakota were the major topics at the regional fly out staged by the International Dairy Foods Association (IDFA) and hosted by Valley Queen Cheese Company in Milbank on Wednesday, April 24.

The event was attended by Senator John Thune, South Dakota Secretary of Agriculture Kim Vanneman and representatives from Agropur, Land O’Lakes, Saputo Cheese and Bel Brands. They met to tour the Valley Queen Cheese Factory and conduct a round table to discuss dairy industry issues.

While in Milbank, Thune also met with area business personnel and community leaders at a luncheon hosted by the Milbank Chamber of Commerce and Grant County Development Corporation at the Visitor Center. Following the luncheon, Thune visited with students at the local high school.

The fly out was the second in the state conducted by IDFA according to Michael Dykes, president and CEO of the organization. IDFA represents the nation’s manufacturing and marketing industry. “If a company has anything to do with milk, they probably are a member of IDFA,” said Dykes. “We speak for the dairy industry, and reaching out with advocacy to policy makers is a large part of what we do.”

The day began with a tour of Valley Queen’s newly expanded facility. The company is near the end of a $53 million project that will boost its production. Valley Queen has a current capacity of four million pounds per day which will increase to five million per day when it moves into its newly created make room that will house more and larger drain tables.

Product in storage was relocated to a nearby warehouse to accommodate the expansion and a small addition erected to house the drain tables. Otherwise the expansion is contained within the existing 200,000 square foot building.

According to Brian Sandvig, vice president of operations and human resources at the company, the expansion is set to go online in July of this year. “We had originally planned for January, but that was an aggressive timeline and we’ve had to adjust it,” he said.

Hirings in recent months has increased the number of staff from 240 to nearly 270 which Sandvig noted is adequate personnel to meet the new production demands. “We are in a fortunate position in that we have more demand for our products than we can supply, we’ve got a growing milk base and we have owners that are willing to invest in the business,” said Doug Wilke, Valley Queen CEO. The company is owned by the Nef and Gonzenbach families and was founded in 1929 by Alfred Nef and Alfred Gonzenbach.

The company collects milk from 40 to 45 farms that house approximately 65,000 cows within an 80-mile radius of Milbank. The current customers will increase production to meet the company’s additional milk requirements according to Sandvig. “It is encouraging to see the amount of investment being made in facilities like Valley Queen and others in the state and that the number of dairy farms is growing,” said Thune during the tour.

Following the tour, the industry representatives met with Thune for a round table discussion. “Senator Thune is very influential within the government, and we wanted him to see and hear first hand about the growth of the dairy industry in South Dakota,” said Dykes. Thune is on the ag, commerce and finance committees.

Trade was the most significant topic at the round table according to Dykes. “With NAFTA (North American Free Trade Agreement) renegotiated and the Chinese negotiations close to being done we wanted to make sure dairy is highlighted in these agreements,” he said.

Dykes noted that China was one of the major whey export customers and the demand for U.S. cheese was growing in the country before the tariffs came into place. Some of those markets have since been lost.

“Trade effects our ag economy which is our No. 1 industry,” said Thune. “When ag does well South Dakota does well. If it doesn’t we experience that on our main streets; there is a direct correlation. We are working to push some of these trade agreements across the finish line. I’m hoping that is an area where we can get bi-partisan support.”

Thune discussed the ongoing negotiations with China and acknowledged it has had a big impact on the state. “We are pushing the administration as hard as we can to complete the deal and cross the finish line,” he said. “They keep telling me we are very close. That we’ve got them right where we want them and that it is going to be huge.”

Dykes indicated that the renegotiated NAFTA is good for the dairy industry. The industry had three priorities concerning the agreement. They wanted to preserve the Mexican market, create greater access to the Canadian market and limit Canadian exports on its Class 7 cross subsidized milk products. The Class 7 category is a policy that created a new category for a low-cost dried-milk product which undercuts American sales.

“All three of our priorities are covered in NAFTA which is good for dairy,” said Dykes. “The agreement should be approved by Congress.”

Dykes noted that a recent International Trade Commission report indicated that the NAFTA agreement should add an additional $275 million to the U.S. economy.

Following the event at Valley Queen, Thune attended the luncheon at the Visitor Center. Several community leaders were present to highlight the growth Milbank is experiencing. Speaking were Pat Raffety, Milbank mayor; Natalie Gauer, hospital administrator; Dwight Samson, United Hardware director of warehouse operations; Tim Graf, school superintendent; Doug Stengel, county commissioner, and Adam Koplin, Big Stone Power Plant manager.

In his address to the crowd Thune noted that the government is currently divided, but pointed out that can sometimes be a foundation to get some big things done. He revealed that it has been done in the past and referenced the 1983 social security reform; 1986 tax reform and overhaul and 1990 welfare reform and balanced budget.

In each case, the president and the majority in the congress were of different political parties. “We were able to find common ground consensus in those years,” said Thune. “I don’t know if that will be the case this time around. I hope it is.”

Thune discussed some of the issues that congress is focusing on including healthcare and broadband service to rural areas. He highlighted the positive events happening including the lowest unemployment in 50 years. “The number of people looking for jobs is now exceeded by the number of jobs available for the first time ever,” he said. “That is remarkable.”

Thune admitted there would be challenges for further accomplishments. “I have to have realistic expectations. The country is divided on issues and there are strong opinions which is reflected in the politics,” he said.

Thune took questions from those present and was asked, “Looking back what would you tell your younger self as you embarked on your career?” Thune jokingly replied, “Don’t run.”

He went on to say that his advice would be to take time to learn the process and keep realistic expectations. “I like to get things done and get results, but congress is a slow-moving place,” he said. “Try to be patient.”

Thune also fielded a question about the market facilitation program which made payments to farmers for losses occurred because of trade disputes. He indicated that it is possible farmers will receive more money as the USDA still has funds available. “I don’t want to make promises, but it is a possibility,” he stated.

Thune wound up his trip in Milbank with a visit to the local school to talk with high school students. – Debbie Hemmer

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