Profits Up at DFA
At the Dairy Farmers of America (DFA) annual meeting this week, the cooperative reported strong financials despite a down dairy economy in 2016. Net sales totaled $13.5 billion, compared to $13.8 billion in 2015. But net income rose to $131.8 million, up from $94.1 million the year prior.
The record net income total was tied to higher sales volumes, operating efficiencies and lower commodity input costs. Income was supported by the acquisition of remaining 50% equity interest in DairiConcepts, a cheese, dairy ingredients and dairy flavor systems manufacturer.
The decrease in revenue was primarily due to lower milk prices. The average price paid to members was $16.22/cwt, compared to $17.18 in 2015. DFA directed the marketing of 62.6 billion pounds of milk for members and others through the cooperative’s consolidated businesses. That’s about 29% of the nation’s milk supply.
“2016 was a challenging year for many parts of our organization and the U.S. dairy industry,” says Rick Smith, DFA president and chief executive officer. “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 continued to expand its commercial investments. The cooperative announced plans to construct a new cheese plant in Michigan with Glanbia PLC, and 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.