Dairy Farmers of America and Dairylea Cooperative have announced plans to merge in 2014, making the regional Dairylea co-op a brand name under the 13,000 member, 48-state DFA cooperative. The dairy farmer owned co-ops said the consolidation would boost market opportunities.
The board of DFA, which is based in Kansas City, has already approved the merger. DFA has reported sales of $12.1 billion in 2012 and markets more than 61 billion pounds of milk annually.
Members of Dairylea, a regional co-op based in Syracuse, N.Y., will vote on the proposal in February. Dairylea has about 2,000 members and markets 6 billion pounds of milk annually on sales of about $1 billion.
Financial terms were not disclosed, but the merger would solidify an already-close relationship.
Dairylea is a member co-op of DFA and the two operate Dairy Marketing Services, a milk merchandising organization. Rick Smith, president and chief executive at DFA, is former chief executive at Dairylea.
"They have been so closely coordinated that this is going to be a pretty smooth transition," predicted Andrew Novakovic, Ph.D., an agricultural economist at Cornell University in Ithaca, N.Y. "In the back room, they have been operating as one for a long time," said James Dunn, Ph.D., a dairy economist at Penn State University.
The Dairylea name would become a brand of DFA and the new entity would maintain a field office and staff in Syracuse. The merger probably would reduce competition among dwindling milk cooperatives, Novakovic said.
Source: The Citizen’s Voice (PA)