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DFA, California Dairies form marketing agency in common

Progressive Dairy Editor Dave Natzke Published on 12 July 2019

The largest dairy cooperatives in the U.S. and California will seek milk transportation and marketing efficiencies under an agreement announced July 10. With the establishment of a marketing agency in common, Dairy Farmers of America (DFA) and California Dairies Inc. (CDI) will combine raw milk marketing and transportation efforts for both cooperatives in California.

In a joint response to questions from Progressive Dairy, DFA and CDI said the arrangement was effective immediately and “focused on enhancing farm-to-plant transportation efficiencies and market stability.”

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Leaders of both cooperatives say the marketing agency in common will bring efficiency to both customers and members while maintaining each co-op’s individual operations and identities. Milk balancing and enhanced customer service are part of short- and long-term strategies.

“The relationship between the individual member-owners of CDI or DFA and their respective cooperatives will continue to operate separately and within their respective cooperatives,” according to the statement. “CDI and DFA will evaluate the combined optimal logistics of getting milk from the closest member farm of either organization to the nearest manufacturing plant as one part of the broader effort to drive efficiencies throughout the entire network of CDI and DFA member milk deliveries.”

“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,” said Andrei Mikhalevsky, CDI president and CEO. “We would also like to help preserve the existing processing asset base in the state.”

“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 Dennis Rodenbaugh, executive vice president of DFA and president of council operations. “We have similar goals and see tremendous opportunities with our two cooperatives working together in an increasingly close partnership.”

CDI is the largest member-owned milk marketing and processing cooperative in California, producing 40% of the state’s milk. Co-owned by nearly 400 dairy producers who ship 16 billion pounds of milk annually, CDI manufactures butter, fluid milk products and milk powders.

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DFA is the nation’s largest dairy cooperative, serving 14,000 family farmers across the U.S. According to its website, DFA’s Western Area encompasses 280 dairy farmer members in California, Nevada and western Arizona. They market about 7.3 billion pounds of milk annually.  end mark

Dave Natzke
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