DFA Reports 2009 Financial Results at 12th Annual Meeting

March 24, 2010

KANSAS CITY, Mo. – Dairy Farmers of America, Inc. (DFA) reported 2009 financial results at its 12th Annual Meeting this week. Owing to a strengthened balance sheet and continued improvement in commercial operations and affiliates earnings, DFA posted net sales of
$8.1 billion and net income of $65.6 million.

“Throughout 2009, we worked diligently to strengthen our financial foundation and find new ways to bring value to the farm,” said Rick Smith, president and chief executive officer. “We will continue working to help increase on-farm profit margins, improve milk quality and production, and bring members value through their DFA membership.”

In 2009, the Cooperative directed the marketing of 62.9 billion pounds of milk for both members and nonmembers through our consolidated entities and unconsolidated affiliates, representing approximately one-third of milk production in the United States. The marketing of raw milk accounted for approximately 74 percent of consolidated net sales in 2009.

Recognizing the extreme financial hardship member-owners experienced throughout the year, DFA paid out all of the $25.3 million of 2008 allocated patronage in cash in April and August, and made special cash payments in July and October totaling $18.3 million.

In May 2009, DFA divested of the operations of National Dairy Holdings to GRUPO LALA. Proceeds were used to reduce debt and further strengthen the balance sheet.

Earnings of affiliates, excluding impairment charges, were $83.6 million in 2009, compared to $62.6 million in 2008. Cash distributions from affiliates totaled $62.1 million in 2009, compared to $17.4 million in 2008.

In addition, several actions resulted in increased cost savings across the business, including milk marketing, supply chain, manufacturing and transportation. Examples include implementing a milk route optimization plan to increase transportation efficiencies, and improvements and upgrades in plants resulting from sustainability initiatives that save energy usage and costs.

The Cooperative also expanded its Farm Services Division. New price risk management options were offered through Dairy Risk Management Services. Dairy Grazing Services was formed to assist members interested in achieving increased profitability by incorporating principles of pasture-based dairying in their operation. Eagle Dairy Direct, a purchasing program designed to provide members discounts on farm supplies, is being expanded to reach more members.