Two of the leading dairy cooperatives are joining forces to establish a dairy marketing agency to maximize the efficiency of both organizations. California Dairies, Inc. (CDI) and Dairy Farmers of America (DFA) have created a marketing agency in common (MAC) to bolster dairy marketing efforts as well as improve transportation logistics.
“Given the significant marketing and regulatory challenges that we’ve seen in California over the last few years, there was a mutual desire to reduce supply chain costs and create additional value and stability for our customers,” CDI President and CEO Andrei Mikhalevsky said in a press release. “We would also like to help preserve the existing processing asset base in the state.”
The MAC has the potential to increase returns to members through the ability to possibly garner over-order premiums from the market due to the amount of milk that is collectively represented. Transportation costs can also be reduced through the MAC by maximizing routes and optimizing the assets of both CDI and DFA. The MAC may also allow the co-ops to coordinate with buyers for transportation subsidies.
CDI is comprised of nearly 400 producer members responsible for approximately 40 percent of California’s milk production, making it the largest member-owned milk marketing and processing cooperative in the state. DFA is the largest dairy cooperative in the U.S. serving 14,000 American dairy farmers, with a sizable presence in California. Both cooperatives believe the establishment of a joint dairy marketing agency can provide better overall market stability and milk balancing in California.
“Our organizations have worked closely over the past decade as the dairy industry in California, the U.S. and the world has become increasingly dynamic,” said DFA Executive Vice President and President of Council Operations Dennis Rodenbaugh, “We have similar goals and see tremendous opportunities with our two cooperatives working together in an increasingly close partnership.”
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