Posted by 
Mascoma Community Development (MCD) is pleased to announce the closing of $20 million in New Markets Tax Credit (NMTC) allocation to finance an expansion and equipment upgrade at Bongards’ Creameries (Bongards) cheese and whey processing facility in Perham, Minnesota.
The funding will allow Bongards to increase production capacity, improve efficiency and quality, increase purchases from local member farms, and retain and create new jobs.
“MCD is pleased to provide NMTC funding to support Bongards’ Creameries’ project, which in turn will add value to the local economy in a highly distressed census tract. This new facility will allow Bongards to respond to market demand, expand their business with increased production capabilities, add more efficient manufacturing processes, and increase its already significant economic impact in this rural community,” says Tad Atwell, Chief Operating Officer of MCD.
MCD is a Community Development Entity (CDE) established by Mascoma Bank which creates impactful jobs in highly distressed, low-income rural and minor-urban communities. MCD also targets downtown redevelopment projects that help revitalize communities and provide services to residents.
Bongards is a farmer-owned cooperative in Otter Tail County, and with the facility expansion, it will increase its purchase from its 267 member farmers, of which almost all are “family farms.” By increasing the facility’s milk intake by approximately 1.4 million pounds per day, Bongards is expected to increase its annual payments to members for milk shipments by approximately $60 million or $225,000 per member farm. The cooperative is primarily comprised of small- to medium-sized farms.
The Bongards project is critical to the dairy product production industry in Minnesota. During the past five years, the industry’s performance in MN has experienced little to no growth, while nationally the industry grew at 4.5% during the same period. The project will support the Otter Tail County agricultural economy through the retention and creation of 158 jobs with 98% paying more than the area’s living wage, at a time when other long-time creameries have closed or other cooperatives are not taking on new members. It will also include environmentally sustainable features, such as utilizing recycled steam from a waste incinerator, which is projected to save 40MM BTU per hour of production, reduce the use of landfills across a multi-county service area, and reduce groundwater consumption.
Chris Freeman, Chief Financial Officer of Bongards, shares, “The New Markets Tax Credit program has been and continues to be instrumental in our ability to continue to provide the maximum value for the milk of our members, while ensuring we are building a cooperative that will be here for future generations. The Community Development Entities that partner with us understand the need to support our farmers and building for the future. They are wonderful partners in our mission of long-term success and service to our farmer owners.”
Dudley Ventures is investing New Markets Tax Credits equity to help finance this project.
“Dudley Ventures is immensely proud to support the Bongards project—a true testament to innovation and growth. The creation of additional processing capacity to allow more family-owned dairy farms to become co-op members shows the critical role that NMTC financing plays in fostering community development and driving economic prosperity. We truly value the collaboration with Bongards and MCD every step of the way in enabling this project to come to fruition,” said Kyle Koupal, Vice President of Dudley Ventures.
MCD is pleased to report that this project has also made possible MCD’s grant of $100,000 to a third-party CDFI (Community Development Financial Institution) partner, Midwest Minnesota Community Development Corporation (MMCDC), headquartered in Detroit Lakes, Minnesota. This grant will provide funds to support the City of Perham single-family rental home rehabilitation and improvement matching program. MCD takes great pride in supporting CDFI organizations that strengthen the communities they serve.