Two dairy cooperatives from Michigan and Wisconsin said today they have formed a strategic alliance for the purpose of balancing and adding value to their members’ milk supplies in Michigan, Indiana and Ohio. The co-ops are Foremost Farms USA, Baraboo, Wis.; and Michigan Milk Producers Association, Novi, Mich.

In a joint statement, the two cooperatives said their nearly $10 million investment is necessary “to keep pace with the growing dairy production in this area.”

The alliance will reduce operating costs and maximize returns for their farmer-members, the co-ops said.

Foremost Farms has purchased and is installing reverse osmosis technology at MMPA’s Constantine, Mich., milk processing plant located in south-central Michigan. The technology will concentrate three loads of milk into one by removing water and concentrating the milk solids in order to reduce the cost of long-haul milk transportation by two-thirds. The installation work will begin the week of July 28 and the first phase is expected to be complete by the end of this year.

Dave Fuhrmann, president of Foremost Farms, says, “For the past year, Foremost Farms has been transporting surplus milk from this region back to our own cheese plants in Wisconsin. This has resulted in a tremendous cost burden for our members. This investment allows us to reduce those cost burdens, improve transportation efficiencies, provide market stability for our members’ growing milk supply and utilize the milk solids to make cheese.”

“Michigan’s milk supply is growing at a rate of three to four percent per year, so investing in reverse osmosis equipment at our Constantine plant helps us keep pace with the growing milk production in our region. This new venture will also improve efficiencies in transportation and give us more flexibility in the market,” said Joe Diglio, MMPA’s general manager.

“This strategic alliance is a great example of the true spirit of a cooperative — working together for the betterment of all. We are hopeful that this venture will serve as a framework for future opportunities to join forces to strengthen the dairy industry and ultimately better serve our farmer-members. It’s a win-win for the Michigan dairy industry,” added Diglio.

Michigan Milk Producers Association ranks No. 56 on the most recent Dairy 100, to be published next month. MMPA’s 2013 revenues from finished goods were $361 million. Foremost Farms ranks No. 25. The Dairy 100 is Dairy Foods’ annual ranking of the largest dairy processors in North America.

MMPA is a member owned and operated dairy cooperative serving approximately 2,000 dairy farmers in Michigan, Indiana, Ohio and Wisconsin. MMPA owns milk processing plants in Ovid and Constantine Mich., the cooperative handles over 4 billion pounds of milk annually.

Foremost Farms USA, headquartered in Baraboo, Wis., is a farmer-owned milk processing and marketing cooperative with annual sales of $1.8 billion. Foremost Farms is a manufacturer and marketer of cheese, specialty whey ingredients, butter and bulk fluid milk to customers around the world. Its 1,800 member-owners live in Michigan, Indiana, Ohio, Wisconsin, Illinois, Iowa and Minnesota. They market nearly 6 billion pounds of milk annually.