Financing dairy production innovations

CoBank and financial institution Pathward, N.A. are key players in enabling innovation through strategic financing. One notable example is their support for the Michigan Milk Producers Association and a Canadian dairy distillery to upcycle dairy byproducts into biofuel.

Ontario-based Dairy Distillery has developed technology to transform a lactose-rich dairy byproduct called milk permeate into vodka, aptly named Vodkow.

This high-value use of milk permeate caught the attention of MMPA, whose Constantine, Michigan, facility produces 14,000 tonnes a year, which it primarily used for animal feed.

Looking to create more value for its dairy farmer members, MMPA partnered with Dairy Distillery to build a plant to process its milk permeate into 2.2 million gallons of ethanol. When blended with transportation fuel, the permeate ethanol could offset 14,500 tonnes of carbon a year, reducing the carbon footprint of the milk processed at Constantine by 5%.

CoBank is helping finance the construction of this project in conjunction with lead bank Pathward. The project transforms a low-value byproduct into more valuable resources while contributing to environmental sustainability and economic growth.