ST. ALBANS, Vt. — Just months after celebrating its 100th birthday, the St. Albans Cooperative Creamery in northwestern Vermont is pursuing a merger with Dairy Farmers of America.
On Monday, June 24, the creamery’s board of directors voted unanimously to recommend that its membership merge with DFA, which is based in Kansas City, Missouri.
The proposal requires support from two-thirds of the cooperative’s 340 members, and two-thirds of the membership must be present to vote at a meeting in late July, according to Leon Berthiaume, CEO of the St. Albans Cooperative Creamery. With approval, the merger would be effective Aug. 1.
Rumors had been swirling for days about the proposed merger. The creamery is the only independent, locally owned dairy co-op that remains in Vermont.
Early Tuesday morning, the day after the announcement, co-op leaders and Brad Keating, senior vice president and chief operating officer of DFA’s Northeast Area, held a press conference via telephone.
During the conference call for reporters, Harold Howrigan, St. Albans Cooperative Creamery’s board president, said the “number one goal” is to protect the heritage of dairy farming in Vermont.
According to Howrigan, the board has been working for nearly two years to strategically plan for the future of its members. The discussions come at a shaky time for dairy farmers in the U.S., and particularly Vermont, which has lost more than 400 dairy farms over the last 11 years.
In 2008, the creamery averaged approximately 495 member farmers. At the end of 2018, it had 350.
The creamery has been a member cooperative of DFA since 2003. As part of the merger, McDermotts, a hauling company currently owned and operated by the co-op, would become a wholly owned subsidiary of DFA, as would the creamery’s store and processing plant. The St. Albans Cooperative Creamery will keep its name.
Howrigan explained that DFA has national marketing strategies and a global reach, so DFA can help find new milk markets. DFA also plans to re-invest in equipment and infrastructure at the creamery, which should help strengthen its future for its members, he said.
“We saw this merger as a logical next step,” said Howrigan, who has a farm with 300 cows in Sheldon. The merger would keep the co-op financially sound so that farmers can “do what they have to do.”
“It’s a signifiant change for all of us,” Howrigan said. “But, as a board member, I see this as a tremendous opportunity, if we can get through the final stages.”
Keating told reporters on Tuesday that DFA has “lots of breadth and depth” in its services for members and that DFA intends to re-invest in the creamery. DFA could also help St. Albans Cooperative Creamery expand its line of value-added products.
“The horizon is wide open as to what happens in the future in St. Albans,” Keating said.
Keating and co-op leaders were a bit reticent with reporters when questions arose about whether the creamery was losing money, or if the proposed merger was actually a buyout. Keating said some of those details fall under “proprietary information,” and that they are being worked out now.
DFA currently has 114 member farms in Vermont and more than 14,000 members nationwide. DFA’s Northeast Area covers 3,100 farms.
Eventually, the co-op’s 340 members will become a part of the DFA’s Northeast Council.
Howrigan said, “‘They’ are becoming ‘we.’” DFA has a strong, farmer-led governing structure, he added.
“We will have a presence there, and we will have a strong say,” Howrigan said. Later, he added, “The margins are very thin at the cooperative level. Our members are just looking for market security.”
Prior to the vote at the end of July, the St. Albans Cooperative Creamery will send out information to all its members in Vermont, New York and New Hampshire. The co-op will also hold five regional meetings before the vote occurs.
“We’re certainly excited about this merger and what it means to the future of our members and our co-op,” Berthiaume said.