DFA Reports Record Profits
At the Cooperative’s annual meeting today, Dairy Farmers of America (DFA) officials reported net income of $131.8 million, compared to $94.1 million of net income for 2015. The increase was attributable to higher sales volumes, overall operating efficiencies and lower commodity input costs. The record earnings were also buoyed by the acquisition of the remaining 50 percent equity interest in DairiConcepts, a manufacturer of cheese, dairy ingredients and dairy flavor systems with eight facilities across the United States.
DFA’s net sales totaled $13.5 billion for 2016, compared to $13.8 billion in 2015. This decrease is primarily a result of lower milk prices. The U.S. annual average all milk price was $16.24 per hundredweight in 2016 compared with $17.12 per hundredweight in 2015.
“Being owned by dairy farmers, we are always working to strengthen our milk marketing business and to bring value to our dairy-farmer members,” said Rick Smith, president and chief executive officer. “While 2016 was a year of challenges for many of our farmers, DFA itself continues to grow, and remains focused on continuing our investments in new and existing plants, as well as progressing on our strategic initiatives.”
In 2016, DFA directed the marketing of 62.6 billion pounds of milk for both members and others through the Cooperative’s consolidated businesses, which represent approximately 29 percent of the total milk production in the United States. The average 2016 price paid to members per hundredweight of milk was $16.22 compared with $17.18 in 2015.
Cash distributed to members in 2016 totaled $42 million compared to $35 million in 2015. In 2016, members received $21 million in equity retirements and $21 million of allocated patronage dividends.
In 2016, DFA continued to expand its commercial investments. The Cooperative announced plans to construct a new cheese plant in Michigan with Glanbia PLC, the largest maker of American cheese in the world. This project is driven by Michigan’s growing milk supply and an increasing worldwide demand for dairy products. Joining DFA and Glanbia in this partnership are two other cooperatives, Foremost Farms USA and Michigan Milk Producers Association. DFA also broke ground on a premium cheddar cheese facility in Western New York, which is a joint venture between the Cooperative, DFA members from western New York and Arla Foods of Denmark. Additionally, progress continues on the construction of a new dairy ingredients plant in Garden City, Kan.
DFA’s Consumer Retail and Fluid Milk and Ice Cream divisions also had continued growth and success. Kemps® introduced a new line of frozen yogurt, Yo2, with a generational target: millennials. Borden® Cheese also launched a new campaign, “Love. Always an ingredient,” with an updated website and graphics that highlight the goodness that comes in every package.