DFA Reports 2010 Financial Results

March 23, 2011

KANSAS CITY, Mo. – As a result of improving dairy markets and its diversified operating structure, Dairy Farmers of America, Inc. (DFA) posted net sales of $9.8 billion and net income of $43.7 million for 2010.

“Much of 2010 was focused on positioning the Cooperative for growth, and on helping our members regain their footing after a disastrous 2009,” said Rick Smith, president and chief executive officer. “Central to this effort is our continued work with National Milk Producers Federation to garner support for its Foundation for the Future proposal, which aims to protect margins, reduce volatility and encourage growth.”

In 2010, the Cooperative directed the marketing of 63 billion pounds of milk for both members and nonmembers through its consolidated entities and unconsolidated affiliates, representing approximately 30 percent of milk production in the United States. The marketing of raw milk accounted for approximately 76 percent of consolidated net sales in 2010.

Cash returned to members in 2010 was $49.3 million, including $35.2 million in equity retirements and $14.1 million of allocated patronage dividends.

Earnings of affiliates were $50.9 million in 2010, and cash distributions from affiliates totaled $36.6 million.

Net sales for the Cooperative’s Global Dairy Products Group were $2.3 billion in 2010, compared to $1.6 billion in 2009. This increase is the result of higher average commodity prices resulting in higher product prices and the full-year impact of acquisitions made in 2009. For example, the acquisition of Berkshire Dairy and Food Products in 2009 helped increase profits in domestic and global ingredient sales.

In addition, DFA marked its entry into the Hispanic market in 2010 with the acquisition of La Vaquita brand cheese. The Cooperative also began positioning for growth globally by increasing efforts to manufacture products that are in demand not just domestically, but also throughout the world. Two of the brands DFA markets, Borden® and Cache Valley®, began producing Gouda cheese, a type of cheese that is in high demand in the export market.

Also with a focus on enhancing value for members, the Cooperative continued expanding its Farm Services offerings, adding a consulting service through Dairy Grazing Services and increasing members’ access to savings through Eagle Dairy Direct.