Dairy Processor Modernization Grant Program

The 2025 Dairy Processor Modernization Grant is offered through the Northeast Dairy Business Innovation Center (NE-DBIC), which operates under the Vermont Agency of Agriculture, Food & Markets and is funded by the USDA Agricultural Marketing Service (AMS). NE-DBIC is one of four regional centers created to advance the capacity and sustainability of the dairy sector in the U.S. Since its launch in 2019, NE-DBIC has received over $56 million to support projects across an 11-state Northeast region including Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont. This grant program aims to address critical infrastructure gaps and support dairy processors and dairy brands in the Northeast by funding modernization projects. The core objective is to fund the acquisition and installation of specialized dairy processing equipment that can improve efficiency, increase processing capacity, enhance product quality, reduce energy consumption, or support new and higher-value product lines. Projects that benefit multiple businesses or incorporate technical assistance may be viewed more favorably during the review process. The 2025 grant program allocates $1,000,000 in total, equally divided between two tiers of applicants. Tier 1 includes applicants who process 10,000 or more units of milk or dairy mix per average production day and may apply for grants between $75,000 and $250,000. Tier 2 includes those processing fewer than 10,000 units daily and may request between $15,000 and $150,000. All applicants must provide a match equal to 25% of the grant request, in the form of cash or in-kind contributions. At least 75% of grant funds must go toward equipment or supply purchases. Allowable additional expenses (up to 25% of the request) include training, consulting services, marketing, and logistics directly supporting the modernization effort. Eligible applicants include licensed dairy processors based in the Northeast that transform raw or component milk into edible dairy products and hold licenses to sell across state lines. Dairy brands that utilize co-packers are also eligible if they demonstrate benefits to Northeast-produced dairy products and submit a Letter of Commitment from their licensed processing partners. Projects must align with one or more of the following program goals: expanding use of regional milk, improving business viability, or meeting consumer demand for regional dairy. Priority will be given to projects that enhance worker safety, reduce plastic or energy use, develop new supply chain partnerships, or reintegrate byproducts like whey. Applications are submitted through the WebGrants system, which opens June 26, 2025, and closes at 2:00 PM ET on August 14, 2025. Interested applicants must register in WebGrants at least 1–2 business days in advance. Required documentation includes quotes for proposed equipment and installation, at least two Letters of Support or Commitment, and a full budget that outlines use of both grant and match funds. A detailed workplan, project goals, funding priorities, and impact metrics are also required. Applications are scored by a multi-state advisory committee based on criteria including alignment with program goals, funding priorities, clarity and feasibility of the workplan, readiness of markets and suppliers, and completeness of documentation. Awards are expected to be announced in September 2025, with projects beginning as early as October 2025. Grant periods may last 9 to 15 months. Grantees must submit interim and final performance reports, and payments are disbursed in three stages: 60% upfront, 20% at mid-project, and 20% at close. The primary contact for the program is Ben Eldredge, reachable at Ben.Eldredge@vermont.gov or (802) 522-9478. Technical WebGrants support is available from Maggie Ericksen at Maggie.Ericksen@vermont.gov or (802) 480-1268.

Demonstrate planning and viability, show letters from suppliers or retailers, and explain impact on production and market access