DFA Reports 2011 Financial Results

March 21, 2012

With a continued focus on growing and strengthening the Cooperative for the benefit of its farmer owners, Dairy Farmers of America, Inc. (DFA) posted net sales of $13 billion and net income of $40.2 million for 2011, adjusted to exclude a $76.9 million non-cash loss related to an exchange of affiliate interest.

In 2011, DFA exchanged its affiliate ownership interest in HP Hood, LLC for 100 percent ownership interest in Kemps, which formed the foundation of a new Fluid Milk and Ice Cream Division. This exchange allowed the Cooperative to convert a minority position to a wholly-owned business.

“We continued the momentum we gained in 2010 to move forward and grow as a Cooperative and as an industry,” said Randy Mooney, chairman of DFA’s Board. “After spending the last few years making improvements, the Cooperative is in a position to take advantage of opportunities in the United States and abroad.”

Throughout 2011, DFA directed the marketing of 63 billion pounds of milk for both members and nonmembers through consolidated entities and unconsolidated affiliates, which represents approximately 30 percent of total milk production in the United States. The marketing of raw milk accounted for approximately 74 percent of DFA’s consolidated net sales in 2011.

Cash returned to members was $49 million in 2011. Members received $41 million in equity retirements and $8 million of allocated patronage dividends paid in cash in 2011.

Earnings of affiliates were $39 million in 2011, and cash distributions from DFA affiliates totaled $27 million in 2011.

Net sales for DFA’s commercial operations were $3.4 billion in 2011 compared to $2.4 billion in 2010, an increase of $995 million or 42 percent. The increase in net sales is the result of higher average commodity prices in 2011, resulting in higher pricing of our products, and increased volumes along with the impact of 2011 acquisitions.

In addition, DFA’s Farm Services Division expanded by offering new services, new tools and more resources, including the Member Savings Network, which brings members savings and discounts on goods and services through partnerships with a variety of national companies.