DFA Annual Mtg 013

At the end of 2013, Jerry Kozak, longtime CEO of the National Milk Producers Federation, retired from that leadership position. His service was recognized by DFA with a presentation at the Annual Meeting. Shown here, from left, are DFA CEO Rick Smith; Kozak; and DFA Chairman Randy Mooney.

Over 1400 members and guests gathered in Kansas City, MO for the 16th annual meeting of Dairy Farmers of America (DFA), the giant milk cooperative. 2013 ended with strong operating results from its wholly owned commercial investments and increased earnings from affiliates. The Cooperative’s adjusted net income was $61.3 million for 2013. DFA’s net sales totaled $12.8 billion for 2013, a six percent increase compared to $12.1 billion in 2012.

The meeting kicked off with the chairman’s report, delivered by Randy Mooney, who operates a dairy in Rogersville, MO. He focused on the steps DFA has taken to advance the dairy industry around the nation and world. Mooney also discussed issues, such as the new Farm Bill, that are affecting farmers every day at home.

“As a national milk marketing cooperative that is owned by dairy farmers across the nation, DFA is committed to bringing value to our members,” Smith said. “That means we are committed to innovation and success by operating first-rate commercial businesses and investing in elite dairy companies. We also want to provide on-farm services that make it easier and more profitable for our members to farm.”

“At DFA, we’re about making sure our members can farm successfully and profitably,” said Rick Smith, president and chief executive officer. “In 2013, we had a successful year. Through strong operational performance and joint venture returns, we were able to execute on our strategic plan. We are also pleased with the improved margins for members.”

In 2013, DFA directed the marketing of 60.6 billion pounds of milk for both members and others through its consolidated businesses and related affiliates. This represents approximately 30 percent of the total milk production in the United States. Payments to members for milk marketed were $7.9 billion in 2013, compared to $7.3 billion in 2012. This increase is primarily a result of the higher U.S. annual average all milk price, which averaged $20.01 per hundredweight.

In 2013, DFA broke ground on two new plants. On September 20, a ceremonial ground breaking was conducted in Linwood, N.Y., for a new cold process milk separation plant. The plant, which is scheduled to be completed later in 2014, will produce cream and skim milk for a range of regional customers. A second dairy ingredient plant is currently under construction in Cass City, Mich., which will produce high-quality condensed whole and skim milk and cream. A third plant has been under construction at Fallon, NV and will produce whole milk powder principally for the export market. It will have the capacity to handle 2 million lbs. of milk per day when it is fully operational.

Another significant development was the decision by the members of Dairylea Cooperative in Syracuse NY to merge with DFA after many years of working closely with the DFA Northeast Region.

These investments and a significant legal settlement in the Southeast resulted in debt increasing on DFA’s balance sheet from $571 million at the end of 2012 to $836 million. Co-op officers reported continued strong credit ratings comparable to well known public companies and expressed confidence the balance sheet would improve with continued strong earnings.

Special guests and additional highlights of the meeting program included:
” Lowell Catlett, regents professor and dean of the College of Agricultural, Consumer and Environmental Sciences, New Mexico State University, discussing the world’s increased need for agriculture, now more than ever
“Maintaining the Global Momentum for U.S. Dairy,” a presentation by Tom Suber, president, U.S. Dairy Export Council
” A summary of DFA’s global strategy by Jay Waldvogel, the Cooperative’s senior vice
president of strategy and global development
” An update on National Milk Producers Federation’s work for the dairy industry by Jim
Mulhern, president and chief executive officer
” An overview of the latest dairy promotion activities by Tom Gallagher, chief executive officer of Dairy Management Inc. who expressed optimism about possible increases in fluid sales as a result of new partnerships with processors to develop innovative new products meeting consumer needs.

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