LA CROSSE, Wis. — At its recent annual meeting, Organic Valley announced that business grew more than 4 percent in 2017, with gross sales exceeding $1.1 billion for the second year in a row. However, the cooperative posted its first financial loss in 20 years.
A combination of factors contributed to an after-tax loss of approximately $10 million. Excess supply of both organic and conventional milk in the marketplace put tremendous pressure on American farmers last year, regardless of region. This resulted in pricing pressures and a slowdown in sales growth that was worse than expected, as well as increased inventories of non-fat dry (powdered) milk.
Organic Valley leaders emphasize that tough times are bringing cooperative members together in a spirit of common purpose in 2018, just as they did in 1988, when Organic Valley was founded during the farm crisis of that era.
“Organic Valley has flourished over the past three decades and exceeded our founders’ expectations in nearly every way,” said Organic Valley CEO George Siemon. “Bumps in the journey, market fluctuations — they are inevitable. But our priorities are, and always have been, our farmer-members, our employees, our animals and our consumers. We’re confident that as we continue to work together as a cooperative, we are a force for good in a troubled time.”
Budgets tightened across the co-op in 2017 as farmers saw a reduction in the amount paid for their milk. Still, the cooperative’s national average dairy pay price of $32.85 per 100 pounds remained nearly double that of the conventional marketplace.
Organic Valley also made some great strides, showing that tough times require smart business decisions, not inaction. The co-op completed updates to its new creamery in McMinnville, Oregon, which now serves as a home base for the cooperative’s Pacific Northwest farmers. A new cheese-cutting and ghee-production facility opened in Cashton, Wisconsin. And the pace of innovation continued for a cooperative that has approached business in a way that people sometimes still call “crazy” after 30 years.
In 2017, Organic Valley:
• extended its 100 percent grass-fed dairy and meat lines to meet consumer demand. Organic Valley is now the number-one national brand for organic, 100 percent grass-fed dairy and meat.
• announced an aggressive plan to become the largest food company in the world to be 100 percent renewably powered by 2019. This will be accomplished through an innovative community partnership that will also bring more solar power to rural communities throughout the Midwest.
•stayed true to its mission of serving rural communities. Organic Valley grew sustainably to 2,043 farms — 14.4 percent of all U.S. certified organic farms — on more than 493,000 organic acres, and the co-op provides meaningful employment for 932 people.
• continued its commitment of sharing the good with $5.2 million in mission-aligned donations and sponsorships to more than 700 organizations as well as disaster relief efforts.
• innovated with new product offerings including Black Cherry Grassmilk Yogurt, Organic Fuel Whey Protein Powder, Mighty Organic 100 percent grass-fed beef snack sticks, and Sweet Cream Half & Half. These are exciting additions to a portfolio of more than 1,400 retail products.
• continued its role as a pioneer and leader in food and farming excellence by taking a stand nationally in support of stronger organic animal welfare standards. The co-op published important public statements in newspapers such as the Chicago Tribune and The Washington Post.
• continued support of disaster relief efforts, sending product and cash to support relief efforts in Houston after Hurricane Harvey, to Immokalee, Florida, after Hurricane Irma, to the areas affected by California fires, and to Puerto Rico after Hurricane Maria.
Although there is no denying that times are challenging in all aspects of the business — from farm to grocery shelf — the cooperative is uniquely resilient and prepared for whatever changes may come.
“We’ll continue to pull together and ask everyone to do their part,” said Arnie Trussoni, president of the cooperative’s board of directors. “We turned the numbers right side up in November and December, and plans are on the table to maximize organic milk utilization. We are a family and we don’t leave one another behind. That’s what our cooperative is all about.”
Source: Organic Valley