DFA reports 2013 financial results

Farm Forum

KANSAS CITY, Mo. – Dairy Farmers of America ended the year with strong operating results from its wholly owned commercial investments and increased earnings from affiliates.

The Cooperative’s adjusted net income was $61.3 million for 2013. DFA’s net sales totaled $12.8 billion for 2013, a six percent increase compared to $12.1 billion in 2012.

“At DFA, we’re about making sure our members can farm successfully and profitably,” said Rick Smith, president and chief executive officer. “In 2013, we had a successful year. Through strong operational performance and joint venture returns, we were able to execute on our strategic plan. We are also pleased with the improved margins for members.”

In 2013, DFA directed the marketing of 60.6 billion pounds of milk for both members and others through its consolidated businesses and related affiliates. This represents approximately 30 percent of the total milk production in the United States. Payments to members for milk marketed were $7.9 billion in 2013, compared to $7.3 billion in 2012. This increase is primarily a result of the higher U.S. annual average all milk price, which averaged $20.01 per hundredweight. Returns to members in 2013 totaled $41.9 million, with $23.3 million distributed from the cooperative’s allocated patronage and $18.6 million through DFA’s various capital retirement programs.

DFA continued to grow its commercial investments in 2013. The Cooperative’s Fluid Milk and Ice Cream Division acquired Dairy Maid Dairy, a processor of milk, juice and fruit drinks located in Frederick, Md. Dairy Maid’s customers include major grocery chains, schools and governmental entities, such as military installations.

The Ingredients Division also continued to expand, with a focus on export opportunities with global customers in strategic markets. DFA exported 222 million pounds of product in 2013, for a fourth consecutive year of record export sales.

In 2013, DFA broke ground on two new plants. On September 20, a ceremonial ground breaking was conducted in Linwood, N.Y., for a new cold process milk separation plant. The plant, which is scheduled to be completed later in 2014, will produce cream and skim milk for a range of regional customers. A second dairy ingredient plant is currently under construction in Cass City, Mich., which will produce high-quality condensed whole and skim milk and cream.

Earnings of affiliates were $72.8 million in 2013 compared to $57.6 million in 2012. Cash distributions from DFA affiliates totaled $38 million in 2013 compared to $36.4 million in 2012.