Dairylea reports strong demand for milk in the Northeast
With dairy processors like the makers of Chobani Greek yogurt adding significant capacity, demand for milk in the Northeast “is creating a once-in-a-generation opportunity for expanding dairy farmers to access the market,” according to Greg Wickham, CEO, Dairylea. Wickham addressed delegates and guests attending the nation’s fifth-largest dairy co-op’s 104th annual meeting, Oct. 10-11, in Syracuse, N.Y., where the organization is headquartered.
With farm milk prices at record highs, the mood was upbeat among the more than 700 producers and industry people attending. The meeting included members and leaders of the northeast region of Dairy Farmers of America (DFA).
Proximity to big population centers, combined with a strong dairy infrastructure, is attracting processors to the Northeast, both those headquartered here, like Agro Farma of Chobani fame, and those with locations in the Midwest, like cheese companies Great Lakes and Bel Giosiosio. To meet the demand, Dairylea partners with other cooperatives and independent producers to market 1.4 billion lbs. of milk per month from 7,500 farms in the region through Dairy Marketing Services (DMS).
Amie Thomas, DMS director of sales and marketing, explained that last year, 11% sales growth required the milk from an additional 141,000 cows. Demand grew 6.6% this year, and the forecast for 2012 is for another 14%. In perhaps the understatement of the session, she said, “I’m a little nervous” about meeting the demand from top customers like Dean Foods, H P Hood, Great Lakes Cheese, Land O’ Lakes and Kraft, along with Agro-Farma, DFA Ingredients, St. Albans, Leprino and Sorrento, rounding out the top 10.
Co-op leaders say the challenge is meeting growing demand while not relying too heavily on over-order premiums, which make the region less competitive and less attractive to processors. At the same time, producers need to have confidence that pay prices over time will allow them to profit from their investments in new facilities and expanded herds.
Throughout the event, tribute was paid to longtime leader Clyde Rutherford, Dairylea’s board president and chairman for 33 years as he steps down after a career as a champion of dairy cooperatives in the region and nationally. He has been succeeded as Dairylea board chairman by William Beeman, a dairy producer from Kingsley, Pa.