DFA Meeting Highlights

(March 23, 2012) Members of Dairy Farmers of America (DFA) held their annual meeting in Kansas City this week. Dave Natzke was there and reported on what was on the minds of the members and leaders of the nation’s largest dairy co-op.

“Characterizing 2011 as a “good to great” year for DFA members and generally good for the overall co-op, DFA president and CEO Rick Smith reported net sales rose $3 billion, to nearly $13 billion last year. Milk payments to producer members increased to nearly $8 billion, with an average pay price of $20.50 per hundredweight. However, costs associated with the acquisition of Kemps Dairy resulted in a net loss of $36.7 million to the co-op.

Noting slumping milk prices and continued high operating costs, Smith said 2012 will be a challenging year for DFA members, and one means to address that in the future will be dairy policy reform. Smith said the co-op remains fervently in support of the Dairy Security Act, proposed dairy policy based on the National Milk Producers Federation’s Foundation for the Future program. He said the current level of milk production growth was a recipe for a crisis, and that the Dairy Security Act would have helped keep milk supply in balance with demand by sending early signals of shrinking profit margins and the need to cut milk production.

Smith also announced DFA’s plan to construct a new dairy ingredient plant in Fallon, Nev., The plant, due to be operational in summer of 2013, will produce whole milk powder for the export market, and use about 2 million lbs. of milk per day.

Milk supply is on the minds of dairy leaders in the rest of the country as well.

In the past week, initiatives in New York and Wisconsin were introduced to increase milk production by 15% in each those states, while in California, Land O’Lakes Western Region producers were informed they needed to reduce milk production beginning April 1, or face severe financial penalties for producing above their base levels.”

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