News Column

Agri-Mark Dairy Co-op Shares $10.2 Million Profit

April 2, 2013

Dan Heath, The Press-Republican, Plattsburgh, N.Y.

Local members of the Agri-Mark dairy cooperative are sharing its $10.2 million profit after taxes from 2012.

Dale Tetreault, who owns Hidden View Farm with his brothers, Dan and Don, in Champlain, says the payment will pay for about one-third of the feed corn they will plant this spring.

Hidden View is one of 1,250 members of the cooperative in New England and New York. The members get about 35 cents per hundredweight, about 3 cents per gallon, for all the milk they marketed through the cooperative last year. That equals about $7,500 for the average member.

Agri-Mark shared a $15 million profit last year. Members received 52 cents per hundredweight, or about 5 cents per gallon.

Agri-Mark spokesman Doug DiMento told the Press-Republican the reduced profits were due to an increase in milk production that caused prices to drop.

"It was just a tough year in the marketplace," he said.

'TOUGH CONDITIONS'

Tetreault told the Press-Republican that, 10 years ago, the Agri-Mark check would have paid the entire cost of planting the corn, but feed prices, as well as most every other cost of running a dairy farm, continue to increase year after year.

That makes Agri-Mark's legislative advocacy on behalf of dairy farmers more important than ever, he said. One example is Agri-Mark Senior Economist Bob Wellington's efforts to ensure dairy farmers receive at least the actual cost of dairy production when they sell their milk.

Tetreault said that allows a farmer to see that they can at least break even or maybe make a profit in the future. While conditions remain tough in the Northeast, he said, in California it appears one or two dairy farms are filing for Chapter 7 (liquidation) bankruptcy a week.

Hidden View Farm milks about 600 cows in a herd of 1,100 on the 1,500-acre property.

VERY STRONG PROFITS

The 2012 shared profits are in addition to $21 million members received in their monthly milk checks in 2012 for high-milk quality and other premiums. They also received $6.3 million in milk-hauling subsidies.

Overall, the cooperative paid out $37.5 million to its members, in addition to providing other services, such as legislative support.

Agri-Mark CEO Dr. Richard Stammer said in a statement that the past year once again showed the cooperative's strength.

"After a slow start during the first half of the year with falling milk and cheese prices, we made very strong profits during the second half, as increasing prices for dairy products helped both the cooperative and our member-owners," he said in a press release.

Members receive part of the profits in checks, with the rest kept in an individual equity or ownership account to support the cooperative's growth. The latter is returned when a member retires or leaves the cooperative.

Checks were mailed in early March, and provide assistance in making ends meet in the face of high milk-production costs.

DAIRY SECURITY ACT

Agri-Mark farmers own the Vermont-based Cabot brand of cheeses and dairy products and the Chateaugay-based McCadam brand of cheeses.

Aged Cabot cheddar remains the cooperative's top-selling product, Stammer said, but sales of whey proteins, butter and cultured products were also strong. The diversity of products contributes to a strong bottom line, he said.

Stammer said the last six years have been the most profitable in Agri-Mark history, which dates back to 1913. Total sales of milk and manufactured dairy products were $880 million in 2012.

Agri-Mark Chairman of the Board Neal Rea, a diary farmer from Cambridge, said in the release that, while it is great the cooperative continues to grow and generate profits for its members, that is not enough.

"Congress needs to implement the Dairy Security Act as part of the Farm Bill this year that contains a margin insurance program for farmers and a mechanism to help balance the U.S. milk supply with demand.

"That is the only real solution to the problem of Northeast farm families consistently receiving farm milk prices that do not cover our costs of producing the milk we provide for consumers," he said. "We need to be able to cover our milk production costs and receive a fair profit for our work with the money we receive in our milk check.

"That's our ultimate goal."



Source: (c)2013 the Press-Republican (Plattsburgh, N.Y.) Distributed by MCT Information Services


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