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Dairylea votes to merge with national cooperative

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Dairylea Cooperative’s board of directors voted Wednesday to merge with Dairy Farmers of America, a move expected to be well-received by about 150 farmers in the north country who are members of the Syracuse-based cooperative.

The decision to merge with the national cooperative based in Kansas City, Mo., will take effect April 1, if Dairylea’s members vote to approve the plan during a special meeting in February. DFA’s cooperative has more than 13,000 members across 48 states, while Dairylea has about 1,200 members across the Northeast.

Dairylea, a 105-year-old cooperative, has been a member cooperative of DFA since 2002. The merger is expected to provide members with access to expanding national and international milk markets, annual stock dividends based on milk production and tax benefits, according to a release.

Sackets Harbor dairy farmer Ronald C. Robbins, who attended Wednesday’s meeting, said the merger will enable members to receive payments for their Dairylea stock, which will be rolled over to DFA. Farmers would receive a cash payment based on a portion of their Dairylea stock if the merger takes effect, he said.

“The stock we contributed to Dairylea didn’t have a lot of value — its only value was the supply of milk its members brought to the side of the road every day,” Mr. Robbins said. “Our retained earnings will be rolled over into DFA, and the bulk of farms won’t have to pay for deductions anymore to meet stock requirements.”

Mr. Robbins said DFA paid a cash dividend of 7 cents per hundredweight last year to farms based on their annual milk production.

By contrast, “we got nothing from Dairylea,” he said.

If approved, the merger shouldn’t have an immediate impact on milk prices for farmers, Mr. Robbins said. But it will provide them with more national and global opportunities to market their milk.

“The number of exports for dairy products has grown substantially, and we wouldn’t have the milk price where it is today without them,” he said. “So when a company like DFA takes the initiative to be a player in world markets, it helps all of us.”

Cape Vincent dairy farmer Lyle J. Wood also attended Wednesday’s meeting, though he is not a member of Dairylea. Woods Farm, a 950-cow dairy operation, ships milk directly to H.P. Hood in LaFargeville.

Mr. Wood predicted Dairylea’s merger with DFA will attract members who now do business with other regional milk cooperatives, including Agri-Mark and Jefferson Bulk.

“Dairylea doesn’t own any processing plants, but DFA owns about 60 of their own and has much greater access for farmers,” he said. “They’re the greatest shipper of milk in the U.S. and internationally known, so it gives members a huge advantage for marketing milk.”

Dairylea and DFA already have a joint agreement with Great Lakes Cheese to supply milk to the Adams manufacturing plant.

Though the merger would consolidate Dairylea’s operations, no employees will lose their jobs under the plan. Dairylea employs 300 people in the Syracuse area.

Six seats would be added to DFA’s board of directors to represent its expanded Northeast membership. Its Northeast Area Council would operate under a structure similar to Dairylea’s board of directors.

Before the cooperative’s vote in 2014, a series of informational sessions will be hosted to provide its membership with an overview of the proposed merger.

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