Dairy Farmers of America Distributes Balance of 2008 Patronage Early

Members Receive Collective $28.5 Million This Year
August 26, 2009

Kansas City, Mo. - Recognizing the continued financial burden its members are experiencing, Dairy Farmers of America, Inc.’s (DFA) Board of Directors has issued the balance of 2008 patronage payments several weeks ahead of schedule.

More than 12,000 members who marketed their milk through DFA in 2008 will receive cash payments equal to 2 cents per hundredweight, for a total of $7.6 million. Combined with the payment issued in April, DFA members received a total of $19 million (a combined 5 cents per hundredweight) in patronage payments for 2008. An additional $9.5 million was distributed to members in July, which was paid from 2009 earnings.

“Our members continue to experience unprecedented stress as a result of the current economic climate,” said Tom Croner, DFA Board treasurer and chair of the Board’s Finance and Budget Committee. “By issuing patronage checks early and in cash, we hope to send a clear message to these hardworking dairy men and women that we are deeply committed to identifying options that deliver short-term relief, while we explore long-term solutions that will prevent a crisis of this proportion from occurring again.”

Patronage is the Cooperative’s way of sharing DFA’s earnings with its members. The amount of patronage a member receives each year is based on the amount of milk marketed through the Cooperative. The payments are being issued 100 percent in cash, regardless of members’ base capital level.

DFA has implemented several efforts to assist members through the current dairy crisis and inspire price recovery:

  • DFA Cares Hotline – The hotline was created to offer members a resource for general questions, market information and access to the Member Assistance Program, which offers trained professionals who provide resources for dealing with stress, depression, and legal and financial consultation.
  • Legislation Work – The Cooperative’s legislative team has worked closely with legislators and urged numerous actions from Congress for programs that improve competitive opportunities, increase dairy purchase/consumption and generate revenue for promotion, including the Dairy Export Incentive Program (DEIP), Dairy Product Price Support Program and Promotion Assessment on Dairy Imports program, respectively.
  • Plant Expansions – DFA continues to make strategic investments in its plants and brands in order to expand markets and increase returns for members. This includes a now-completed $23 million expansion at DFA’s Fort Morgan, Colo., plant, and a $39.4 million expansion underway at DFA’s plant in Schulenburg, Texas.
  • New Products – New products increase dairy demand. Borden Cheese’s Single Sensations line has been growing steadily, and two new flavors will be introduced this fall. In addition, DFA works closely with Dairy Management Inc. to develop new products designed to increase dairy consumption, such as a dairy-based energy drink in testing and development phases at Keller’s Creamery.
  • Supply Chain Savings – Several projects are underway to improve transportation efficiency, including negotiating reduced hauling rates, a new transportation management system to consolidate loads and a pilot program to reduce members’ transportation costs.