Southcentral Pa. Correspondent
KANSAS CITY, Mo. — Farmer-owners and their roles in feeding the world was the focus of the recent annual meeting of Dairy Farmers of America at the Sheraton Kansas City Crown Center. More than 1,400 members and guests attended the annual business meeting and leadership conference, one of the largest turnouts ever in the cooperative’s 15-year history.
With the theme, “From this Land,” meeting speakers addressed dairy and agriculture issues, from the raw milk side to supplying global consumers. Financial reports highlighted a successful year, along with settlements of legacy legal issues dating back more than a decade. Seven outstanding farmer-member families and 29 scholarship recipients were recognized as a highlight of the annual awards dinner.
“As a national milk marketing cooperative, DFA is delivering its members’ high-quality milk around the globe, through dairy ingredients, its own branded products and those of its customers,” said Randy Mooney, dairy farmer from Rogersville, Mo., and chairman of DFA’s board of directors.
“From this land, we are all making a difference. Members are producing nature’s most perfect food. From our plants and our customers’ plants, that milk is being processed into cheese, butter, ice cream, yogurt, ingredients and more. Through that process, we are feeding the world,” Mooney said.
Rick Smith, DFA’s president and CEO, presented an overview of the cooperative’s business and financial highlights and emphasized ongoing efforts to provide greater value and service through a variety of programs available to farmer-owners.
DFA directed the marketing of 61.4 billion pounds of milk through 2012 for both members and others through its consolidated businesses and affiliates, representing nearly 30 percent of total milk production in the U.S. Payments to members for milk marketed totaled $7.3 billion, equating to an average price of $18.49 per hundredweight. Through its various equity retirement programs, the cooperative returned $32 million in cash to members during the year.
“Our mission is to bring value to the members,” Smith said. “One way to do this is to participate in value-added opportunities for dairy, both domestically and globally. This supports our goal and obligation to help feed people around the world, and meet the demand for healthy and nutritious dairy products worldwide.”
DFA exported 203 million pounds of product in 2012, the third consecutive year of record sales. And, as part of its global strategy, construction is currently underway in Fallon, Nev., on a state-of-the-art plant designed to provide consistent supplies of quality, dried dairy ingredients for export to customers around the world.
Other commercial expansions during 2012 included the Fluid Milk and Ice Cream Division’s acquisition of Guida’s Dairy in New Britain, Conn., and Cass-Clay Creamery in Fargo, N.D. More than 20 new products were launched into the marketplace through the consumer division under the cooperative’s Borden, Cache Valley, Plugra and La Vaquita brands.
Year-end financials reported total sales of $12.1 billion, a net income of $83 million, double that of the prior year, with a net loss of $133 million after adjustments for non-recurring charges. Those non-recurring items included a $216 million, net of tax, litigation charge and a $77 million, net of tax, impairment/loss on an exchange of affiliate interest during 2011.
Global dairy issues were also the focus of a “world of opportunity” panel featuring Tom Suber, president of the U.S. Dairy Export Council, Jay Waldvogel, DFA senior vice-president of strategy and international development and Larry Jensen, president of Leprino Foods.
Suber said that most of the “new” U.S. milk produced over the past several years has gone to the export market, although overseas sales are now beginning to flatten out. He sees the greatest opportunity in demand for skim milk powder, and less for whole milk powder and cheese. Trade policy trends are currently favorable to export demand, with the inclusion of Japan and Canada in Trans-Pacific trade agreements.
As a DFA strategist for dairy exports, Waldvogel emphasized the importance of following established customers into the global trade, along with building an internal structure designed to serve those markets. Working closely with Dairy Management, Inc., U.S. Dairy Export Council and the CWT program of National Milk Producers Federation further provides avenues for global sales.
With 10 plants across the U.S., Leprino Foods is the nation’s largest producer of lactose from its extensive manufacturing of primarily Mozzarella/pizza cheese products. The country of Japan, noted Leprino president Larry Jensen, is the largest user of lactose. The U.S. is the largest consumer of Mozzarella, followed by Brazil in second place. He emphasized the need for a supplier to be a “market fixture” in order to be viewed as a dependable supplier and sees room to grow globally with current customers.
Members and guests were challenged by special guest speaker, Jason Clay, to think ahead to how Planet Earth can be maintained with an anticipated world population of 9 billion mouths to feed in decades to come. Clay, senior vice-president of market transformation for the World Wildlife Fund, cautioned that as much food will be needed in the next 40 years as has been needed in the last 8,000 years.
“Sustainability is a journey, not a destination,” said Clay, voicing concern that “we are eating the planet. Today, we’re using about one and one-half times the carrying capacity of our planet. Population multiplied by consumption must equal the carrying capacity of the planet.”
While population growth is expected to slow, consumption is expected to increase, as those in emerging economies gain more disposable income. Clay further noted that most of us are not paying the actual, true cost of food and that one in every three calories is wasted somewhere between production to consumption.
Seven family farms representing DFA’s geographic regions were recognized as members of distinction. Local farms honored with the cooperative’s recognition were: Ayers Farms, Perryville, Ohio; Piper and Hamilton Families of Piper Farm LLC, Embden, Maine; and Huffard Dairy Farms, Crockett, Va.
The DFA Cares Foundation Scholarship program awarded a combined total of $28,000 to 29 recipients. Local pre-college winner was Amber Gabel, Newport, Pa.
Local undergraduate recipients are Jenna Hill, Clyde, N.Y.; Laura Holtzinger, Millville, Pa.; and Emma Reeves, Pulaski, Va.
Seven retiring directors were recognized for their years of service on the DFA board. Retiring from the board are: Mickey Childers, Somerville, Ala.; Larry Frederick, Baring, Mo.; Lew Gardner, Galeton, Pa.; Les Hardesty, Greeley, Colo.; Pete Mensonides, Turlock, Calif.; Ellis Roberts, Preston, Idaho; and Rob Wonderlich, Ollie, Iowa.