Dairylea Cooperative Inc. -- 1995 growth by employment

At its 1995 annual meeting in October, Dairylea Cooperative Inc.'s Chief Executive Officer Richard P. Smith remarked, "Without a doubt, the past year was our best one yet in carrying out our mission statement."

The cooperative's mission statement says that Dairylea will be farmer-driven. During the past year, 237 new farms joined the organization. Of these, 68 were start-up farms, and 45 had milking herds of 150 cows or more.

The mission statement says that "We will seek to maximize net returns at the farm by preserving and enhancing milk markets and milk-marketing relationships, and by providing services and farm programs that create economic value."

Milk sales rose nearly 19 percent over the previous year. And premiums paid to members went up 14 percent.

In a period when there was a 3.7 percent decline in dairy farms in the Northeast, Dairylea members' milk production increased by 18 percent. Average farm size among members continues to grow. Average annual production among member farms is 20 percent higher than the Northeast average.

Employment in the cooperative grew more than 100 percent, in part because of the acquisition of Empire Livestock Marketing Cooperative. With 10 regional markets, according to Smith, "Empire commands in excess of a 50-percent market share of all animals marketed in the region."

Dairylea is a Syracuse-based cooperative of 400 dairy-farm members throughout the Northeast. It markets about four billion pounds of milk annually, from Maine to Ohio.

The cooperative provides a number of services to its members. In 1994, field personnel made more than 11,000 individual farm visits to help members improve their milk quality or to assist in other operational matters. These services yield financial awards for members, as evident from the fact that the cooperative paid out more money in quality premiums to its members than ever before.

Dairylea has dedicated considerable resources in recent years toward upgrading its milk-testing capabilities as well as providing quick and easy access to testing information. Easy access to this information is an important farm-management tool. A new automated reporting system put into operation in 1994 allows any member to access his laboratory results via a touch-tone telephone.

The cooperative provides members with financial and farm-management resources through such services as its Member Loan Program. Private farm consultations provide expert assistance in the areas of financial planning, cost control, and long-term goal setting. The cooperative has established a resource-cell network of agricultural professionals.

DEBB--Dairylea's Electronic Bulletin Board--allows members with computers to access Dairylea's database for information that can help in management decision-making.

A pilot program offering Fixed Price Forward Contracts provides members with the opportunity to manage price risk by locking into a known price for a portion of their future milk production. Under the program, Dairylea calculates daily bid prices for up to six months in advance, based largely on daily price levels of the Coffee, Sugar, and Cocoa Exchange's cheddar-cheese futures market. Members can access a recorded information line every business day, and then contact a staff member who will write a contract at a quoted price.

Another pilot program is designed to facilitate bulk buying. The experimental program will determine whether, through a well coordinated, large-scale buying system, members will be able to reduce costs.

Dairylea's wholly owned insurance subsidiary, Agri-Service Agencies, provides worker's compensation insurance; "Farmer Flex," a flexible benefit plan; and a medical-expense-reimbursement plan.

Agricultural and milk-marketing businesses in which Dairylea has invested include H.P. Hood manufacturing and fluid milk operations in New York, Vermont, Maine, Connecticut, and Massachusetts; Upstate Milk Cooperatives in the western part of New York state; OAT-KA Milk Products, also in western New York; Atlantic Processing, Inc. in Pennsylvania; North Country Dairy manufacturing plant in northern New York; Empire Cheese manufacturing plant in western New York; Dietrich's Milk Products in Pennsylvania; Sorrento Cheese in western and downstate New York; and Empire Livestock's 10 regional markets located throughout upstate New York and in northern Pennsylvania.

Copyright Central New York Business Journal Oct 30, 1995
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