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Darigold to close

Medford's last milk processing plant will shutter Feb. 28, putting 29 employees out of work.

Seattle-based Darigold is the nation's fourth-largest dairy cooperative based on milk volume and one of the largest privately held companies in Washington state, with annual revenue of more than $2 billion.

"The need to significantly upgrade the facility to maintain compliance with food safety, employee safety and environmental regulations, and the plant’s distance from its core markets, among other reasons, led to the decision to close the plant," Darigold said in a news release.

For several years, Darigold has recognized that the aging plant, just west of the Rogue Valley Mall, required improvements. In 2013, the company announced plans to upgrade the wastewater system at the plant, installing two 16,500-gallon tanks, as part of a multiyear modernization of its 12 facilities in five states.

"Medford is an old facility and it is becoming more and more of a struggle to keep effective and efficient handling of wastewater," Steve Rowe, senior vice president of corporate affairs, said at the time.

Consolidation has been a part of the industry for decades as distribution and ownership changed.

"The closure of Darigold’s Medford milk processing plant is the next step in that continuing pattern," the company said. "Newer, more modern facilities can provide customers, dairies and the public a higher degree of reliable food safety, employee safety and protection of the environment. While this decision is not taken lightly, it is necessary to ensure we are meeting the needs of our customers and the broader community that relies on the safe and environmentally sound production of high quality dairy products throughout the region."

Darigold will continue to operate its 11 other processing plants in Oregon, Washington, Idaho and Montana. Five manufacturing plants — in Chehalis, Lynden and Sunnyside, Wash., and Caldwell and Jerome, Idaho — processed 5.3 billion pounds of milk and 845 million pounds of finished products during the most recent fiscal year. Those sites operate together with Issaquah, Seattle, Spokane, Boise, Bozeman, Portland and, until now, Medford.

Which of the packaging plants will take on the additional work created by the local closure remains unknown.

"Those decisions have not been made yet," Darigold spokeswoman Michelle Carter said.

A half-century ago, local dairy operations were plentiful, with dozens in some counties. Today, there are six milk processing plants in the state.

More than 70 years ago, Jorgen Jorgensen launched a dairy enterprise at the site that managed to navigate the challenges of ownership changes, culture and technology — until now.

At one time, the dairy produced ice cream, cottage cheese and butter. Jorgensen's was the dominant dairy product brand in Jackson County for more than a quarter-century before selling to Mayflower Farms of Portland in spring 1967. By 1971, the Jorgensen name had faded into history. A decade later, Darigold Inc. obtained the plant.

The plant went through changes as time wore on. There's no word yet from Darigold about what will happen after the closure and what changes consumers may see.

"It's a little too early to tell," said Umpqua Dairy President Doug Feldkamp, who oversees the closest production plant to Medford. "Distribution systems have definitely improved over the years. Everybody is reaching out farther. I'm sure Darigold's distribution to Southern Oregon is not predicated on having a plant there."

Darigold and Umpqua are the primary dairy suppliers for Southern Oregon, each handling private label contracts, as well.

"Any time a milk plant stops production it brings a change in our industry, for sure," Feldkamp said. "This will idle some workers, which is too bad."

Darigold's Medford management and staff were not immediately available for interviews. The company's website lists 26 job openings, including five in Portland.

Umpqua has a distribution warehouse in Central Point off Hamrick Road.

"Potentially we could have use for some of them," Feldkamp said. "We're always looking for good people."

Reach reporter Greg Stiles at 541-776-4463 or business@mailtribune.com. Follow him on Twitter at www.twitter.com/GregMTBusiness, on Facebook at https://www.facebook.com/greg.stiles.31, and read his blog at www.mailtribune.com/Economic Edge.

Darigold, Medford's last milk processing plant, will shutter Feb. 28, putting 29 employees out of work. Mail Tribune / Bob Pennell
Mike French is reflected in a monitoring mirror while working the gallon milk line at the Darigold plant in Medford. Mail Tribune / 2002 file photo