Co-op has profit of $12 million for 2008

Agri-Mark dairy cooperative made a profit of $11.8 million for 2008, its second best year for its 1,300 members in the Northeast.

The cooperative's sales of milk and dairy products totaled $881 million.

Agri-Mark's best year was in 2007, when it made a profit of $17.6 million.

Last year's profit was dependent on sales of the cooperative's Cabot and McCadam cheese lines, which exceeded expectations, combined with steady sales of butter and whey proteins.

A New York medium cheddar made at the McCadam plant in Chateaugay was the second runner-up at the 2009 U.S. Championship Cheese contest, which ended Thursday in Green Bay, Wis.

Given this year's declining milk prices for farmers and plummeting prices for cheese, which determines the cooperative's bottom line, last year's profit allocation to its members of 25 cents per hundredweight was a bright spot in a sea of bad news, spokesman Douglas J. DiMento said.

The profit represents about $4,500 for the average Agri-Mark member milking 100 cows.

"We've had two good years," Mr. DiMento said. "We hope we can continue, but cheese prices are extremely low, the lowest we've seen in decades. Hopefully, we'll see them bounce back. There has to be a plan to help curb excess milk production. We need a shift in dairy policy so we don't see such low prices, something that takes into account the cost of production. Prices have never crashed this low before."

Agri-Mark is forecasting March as the rock bottom blend price for farmers at $11.32 per hundredweight of milk. Most dairy farmers need at least $17 per hundredweight to break even. April probably will be another poor month, with the predicted blend price $11.71 per hundredweight. Last year's high was $20.61 per hundredweight in July.

Even though last year's prices were relatively good, farmers faced high prices for fuel, feed and fertilizer, which haven't dropped, Mr. DiMento said.

Several Agri-Mark members already have decided to get out.

"We're starting to see some auctions and sell-outs," said David B. Elliott, membership manager for Northern New York. "I do expect a larger attrition rate than usual. The next three months I believe will take a big toll. The real litmus test will come down to who puts seed in this May."

The price for dairy cows is also on the decline, from $1,500 to $2,200 down to a little more than $1,000.

"If you sell out now, you're not going to get a good price," Mr. Elliott said. "Unfortunately, some people aren't going to have a choice."