More than 3 billion lbs of Pennsylvania milk could soon have a new destination as Chobani prepares to invest $1.2 billion in a Lehigh Valley processing plant. The company will take over a former Keurig Dr Pepper manufacturing facility in Upper Macungie Township, with production expected to begin in 2027.
The investment is the largest private-sector investment in the history of Pennsylvania’s agriculture industry, according to Gov. Josh Shapiro’s administration. The project is expected to create 900 full-time jobs over the next five years.
For Pennsylvania’s dairy farmers, though, the bigger focus is on the amount of milk expected to move through the facility.
Once operating at full scale, Chobani is expected to source more than 3 billion lbs of Pennsylvania milk each year. That is roughly 30% of all the milk currently produced in the state.
“Pennsylvania is home to one of the highest number of family-owned farms in the country. When we walked into this factory, we knew it was a great fit for what we want to build for the future,” says Hamdi Ulukaya, founder and CEO of Chobani.
The company will take over the 1.5-million-square-foot manufacturing facility, previously operated by Keurig Dr Pepper. Chobani plans to make food products beyond yogurt at the facility, although the company has not yet provided a full list of products.
Protein Powers Dairy Demand
The investment comes as dairy finds itself in the middle of a major food trend: protein.
Consumers are increasingly looking for protein-rich foods as they try to build more protein into their diets. Dairy products, including yogurt, milk, cottage cheese and cheese, have benefited from the demand.
The growing use of GLP-1 medications also is adding another layer to the trend. As consumers using medications such as GLP-1s eat less food overall, many are placing more emphasis on nutrient-dense foods and getting enough protein in smaller meals and snacks.
Dairy products are well positioned to fit into the trend, giving processors opportunities to develop products around changing consumer preferences.
For Chobani, a company built around yogurt, the protein boom also creates opportunities to move beyond traditional dairy categories. High-protein yogurts, shakes and other dairy-based foods give processors more ways to turn milk into products consumers are seeking.
Looking Beyond Fluid Milk
Pennsylvania has long been one of the nation’s largest dairy states. It still has the second-highest number of dairy farms in the U.S., but the industry looks much different than it did a decade ago.
The state has lost more than 2,000 dairy farms since 2017, while total milk production has fallen about 10% over the past decade.
A 2017 study commissioned by the state and the Center for Dairy Excellence recommended diversifying Pennsylvania’s dairy processing base. Much of the state’s processing capacity has historically been tied to fluid milk, a category facing declining consumer demand as more milk moves into cheese, yogurt, powders and other dairy products.
Since the 2017 study, Pennsylvania has added several processing investments. ByHeart upgraded its Reading infant formula plant with a $22 million investment in 2022, while Maola Local Dairies expanded a former HP Hood plant in Philadelphia.
Other processing capacity has disappeared. Dean Foods and Harrisburg Dairies closed, although their plants were eventually purchased by other businesses.
The company will receive $50 million in state loans and grants through Pennsylvania’s Strategic Investments to Enhance Sites program. The plant could also qualify for the state’s Economic Development for a Growing Economy dairy processing tax credit in the future.
Those incentives became tied to the dairy industry as Pennsylvania worked to attract more processing capacity. The state used similar tools while pursuing a Fairlife plant capable of processing 5 million lbs of milk per year. Fairlife ultimately chose New York for its facility in 2023.
Chobani Expands Across the U.S.
The Pennsylvania investment is part of a much larger expansion underway across Chobani’s U.S. manufacturing footprint.
In Michigan, Chobani is investing $567 million to expand its La Colombe facility in Norton Shores. The project is designed to increase the facility’s milk use as the company adds production capacity, including ready-to-drink coffee.
The Michigan investment follows a $500 million expansion Chobani announced for its Twin Falls, Idaho, facility and the company’s $1.2 billion plant in Rome, N.Y. Chobani has continued to expand its manufacturing footprint as it moves into more dairy-based products and beverages.
The broader investment comes as dairy processors across the country are making major bets on future demand. U.S. dairy processors have announced about $13 billion in new and expanded processing capacity across 19 states, with those projects expected to give the industry the ability to process an additional 15 billion lbs of milk by 2030.
Much of the investment is tied to the same trends behind Chobani’s expansion. Processors are building facilities capable of producing high-protein yogurts, cultured dairy products, drinks, cheese and dairy ingredients as consumers look for more protein-rich foods. About $2.8 billion of the announced investment is going toward yogurt and cultured dairy capacity, while another $3.2 billion is going toward cheese.
Domestic demand is only part of the equation. The U.S. Dairy Export Council expects exports to become an increasingly important growth engine for U.S. dairy, with USDA projecting exports on a skim-solids basis to increase from 21.5% of U.S. milk production in 2027 to 25.2% by 2035.
A New Market for Pennsylvania Milk
Shapiro says the project will strengthen the state’s dairy industry while creating new opportunities for Pennsylvania’s more than 4,000 dairy farmers.
“I’ve spent a lot of time on our farms and in our rural communities, hearing directly from Pennsylvanians about the kind of investments they want to see in our Commonwealth. This $1.2 billion investment from Chobani is the largest private sector investment in the history of Pennsylvania’s agriculture industry and will strengthen our dairy industry, support our farmers, and reinforce our position as a national leader in agriculture and food manufacturing,” Shapiro says.
Jayne Sebright, executive director of the Center for Dairy Excellence, says the new Chobani plant could have an impact beyond the milk moving through its doors.
“The facility in Allentown brings new market opportunity to Pennsylvania’s dairy industry, helping to strengthen the viability of these individual dairy farm families while revitalizing our rural communities that depend on the economic revenue and jobs these farms provide,” she says.
For Pennsylvania, Chobani brings those broader industry trends into a single facility. The company is preparing to put $1.2 billion into a plant capable of sourcing more than 3 billion lbs of milk annually, while building products for a consumer base increasingly interested in protein.
The plant is still a few years from production, and Chobani has not laid out every product or milk-sourcing detail. But the Pennsylvania investment fits into a much larger expansion by Chobani and the broader dairy processing industry.
Billions of dollars are being invested in new processing capacity as companies prepare for consumers who are eating more protein and for growing demand for dairy products in the U.S. and overseas.
For more on dairy processing, read:
