Updated: Darigold picks Pasco for $500M protein and butter plant

Darigold Inc. will build its largest ever milk drying plant in Pasco, cementing the city’s status as one of the Northwest’s leading centers for food processing.

If completed,150 acres at the Port of Pasco’s future Reimann Industrial Center off Highway 395 will become home to the largest protein and butter plant of its type in North America. The 400,000-square-foot facility will cost an estimated $450 million to $500 million to construct.

The port’s three-member commission approved a $3.3 million purchase and sale agreement with the Seattle-based dairy cooperative at a special meeting July 1 after a year of negotiating under the name “Project Ruby.”

“Darigold’s state-of-the-art facility will use the latest technology, serve as a model of sustainability and create a new market for our region’s ag producers,” said Randy Hayden, executive director for the port.

The agreement gives Darigold 180 days to conduct due diligence. Notably, it is scrutinizing  Washington’s aggressive carbon pricing policy to combat climate change. The policy sets the goal of net zero emissions from industry by 2050 and echoes Darigold’s own goal to become carbon-neutral by 2050, which it announced in 2020. 

Until rules to implement the new carbon regulations are written, it is unclear how they will impact Darigold’s reported $2 billion business.  

“It’s a mystery,” said Hayden, who added that Darigold’s proposed plant is the single largest project the port has ever welcomed.

Darigold is the processing and marketing arm of the Northwest Dairy Association, which is owned by 350 dairy enterprises in Washington, Oregon, Idaho and Montana. 

Its 11 plants, including one in Sunnyside, process more than 100 billion pounds of milk annually into dairy products sold in groceries, including Costco, restaurants and other outlets. 

Hayden called the deal the headline of the year, but cautioned against celebrating before the due diligence period concludes and the deal closes. He expects that to happen by the end of the year. 

Stan Ryan, president and CEO of Darigold, said the protein and butter operation in Pasco will help the company meet its carbon neutrality goals.

The plant will cut  greenhouse gas emissions associated with transportation and employ cutting-edge technologies to cut per unit emissions by a quarter. The company said the strategies could mitigate more than 300,000 metric tons of carbon dioxide annually.

The Darigold project covers half the 300 acres in the port’s future Reimann Industrial Park property. The plant would be operational by Labor Day 2023. 

The port moved to establish a new park on the success of the nearby Pasco Processing Center, home to major food processors. In 2018, it paid $6.5 million for 300 acres of farmland and associated water just east of the processing center. Reimann is named to honor Ron Reimann, the late port commissioner who died in a vehicle accident at his farm. 

Hayden said Darigold is the only firm that has committed to Reimann to date, though other potential candidates have “kicked the tires.” 

The $22,000 per acre price-tag is what the port paid. The deal includes water rights and the center pivot irrigation system that waters the alfalfa growing there now. Darigold is expected to take the entire circle out of agriculture production. 

Hayden said discussions with Darigold began about a year ago and coincided with the port’s efforts to plan the future development. It will cost nearly $16 million to bring roads, water, sewer and a rail spur to the site. The port will initiate work when the Darigold deal closes.  

Funding includes a $7.5 million appropriation in the state’s biannual capital budget, approved by the Legislature this year if the port inked a deal for a “large food processor” by late 2023. Hayden said the port will leverage local dollars reserved for economic development to round out the budget.  

Darigold may be eligible for economic incentive funds from the Governor’s Strategic Reserve as well, though none had been confirmed as of late June. The governor’s office was not immediately available to confirm if it is considering an award to Darigold. 

Darigold expects its newest plant to be fully operational by 2023 and to employ 200 in addition to the 1,700-plus it already employees. It will support more than 1,000 jobs in related industries in the supply chain.

The city of Pasco will provide water and sewer service to the plant, which will tap into an existing natural gas line that crosses the property already. 

Darigold will split its wastewater stream with half going to the city’s industrial wastewater processing reuse facility and half to the municipal treatment plant, which is undergoing an expansion to accommodate Pasco’s growth. The company will construct a wintertime wastewater retention pond to hold waste during the cold season when it cannot be sprayed on fields. 

The food processing industry employs 47,000 people in Washington at 1,765 firms with a combined annual payroll in excess of $2 billion, according to Food Northwest, an industry association.

Franklin County, the city of Pasco and the Tri-City Development Council (TRIDEC) supported the effort to bring Darigold to the Mid-Columbia. 

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