Dairy Farmers of America mulls merger with US dairy cooperative

USA – Dairy Farmers of America (DFA) plans to merge with Vermont-based dairy cooperative, St Albans Cooperative Creamery (SACC).

SACC’s board of directors have voted to recommend the merger which will involve the co-op’s leaders, dairy farmers and customers moving ownership to Kansas based DFA.

The merger with DFA, which has 14,000 dairy farmers and 46 plants nationwide, is set to give St. Albans access to more capital, larger markets and economies of scale amid rapidly changing market dynamics.

The deal looks to address challenges faced by dairy farms in Vermont, which have struggled in recent years with oversupply of milk and a long run of low milk prices in the US.

DFA will invest in the co-op’s assets in St. Albans, building on a long-term partnership between the two firms since 2003.

“Our board has been working nearly two years to strategically plan for the future of our members,” said Harold J Howrigan, chairman of the SACC board of directors.

“With increasing shifts in customer needs, an imbalance in supply and demand and a volatile milk price cycle, it is clear change is needed for our cooperative; however, with change comes great opportunity.

“DFA offers increased value to our members with the ability to make continued investments in operations, a clear vision for the future and the depth of leadership to carry out that vision.”

For DFA, the merger is expected to provide its members with established customer relationships, investments in critical hauling and manufacturing assets in the north east and increased milk marketing activities in the region.

“DFA and St Albans have always had closely aligned philosophies and values, with both cooperatives focused on providing value to members and committed to preserving the northeast tradition of family dairy farming for years to come,” said Brad Keating, senior vice president and chief operating officer of DFA’s northeast area.

As part of the proposed transaction, McDermotts, a hauling company owned and operated by St Albans Cooperative Creamery, would become a wholly owned subsidiary of Dairy Farmers of America.

Also, St. Albans Cooperative Store and St. Albans Cooperative Creamery Plant will be part of DFA.

Following the merger, St. Albans Co-op is exploring several options regarding Waterbury-based Ben & Jerry’s, which sources most of its milk from the cooperative.

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