Parched, welcoming first-class supplier of milk (5)
I believe the answer is:
dairy
'supplier of milk' is the definition.
(building which processes cow's milk)
'parched welcoming first-class' is the wordplay.
'parched' becomes 'dry' (similar in meaning).
'welcoming' means one lot of letters goes inside another (in sense of 'inviting in').
'first class' becomes 'ai' (A1 - top quality).
'dry' going around 'ai' is 'DAIRY'.
(Other definitions for dairy that I've seen before include "milk supplier" , "milking cows here" , "Where butter's made" , "Factory for milk products" , "Business supplying milk etc" .)