Operations at the plant, which will produce cream, whole milk powder (WMP), skim milk powder (SMP) and non-fat dry milk (NDM), are scheduled to begin in late 2017.
Production will meet rising demand for US dairy both domestically and internationally, the company said in a statement.
Its Garden City plant will receive 4m pounds of milk per day from dairy farms in the region - supporting industry growth in Southwest Kansas.
“The construction of this plant not only fits with our global ingredients strategy, but also provides a local home for DFA member’s milk in the Southwest region, which was much needed as many local farms were sending their milk to other areas of the country,” said Michael Lichte, vice president for dairy marketing and business planning, DFA.
The Garden City groundbreaking ceremony was attended by the likes of Kansas Governor, Sam Brownback, and Janet Doll, the Mayor of Garden City.
“Kansas has always been a key player in dairy and agriculture as a whole,” said Brownback.
“With this new plant, we are literally breaking ground for our state and strengthening Kansas’ footprint on a global scale, which is truly exciting.”
The facility is a partnership between DFA and 12 of its member farmers in Southwest Kansas.
DFA, America's largest dairy processor, initially agreed to build the plant in partnership with Chinese dairy Yili.
Yili, China's largest dairy manufacturer, and DFA announced plans to form a joint venture to produce milk powder in November 2014.
Yili reportedly recently decided, however, to "pause on moving forward as an investor," according to local reports.