March 4, 2010
Methuen, Mass. -- Agri-Mark, the Northeast's premier dairy farmer cooperative, has announced a profit after taxes of $14.9 million for the year 2009. Agri-Mark sales of its members' farm fresh milk and of its award-winning dairy products, especially its Cabot and McCadam brands, were $655 million last year.
The importance to its farmers of this level of profit from operations - - Agri-Mark's second best operating results ever - as well as $17.5 million in market premiums throughout the year -- was pivotal in a year that saw farmgate milk prices plunge to lows last seen during the Carter Administration.
“It was a terrible year on the farm, but fortunately 2009 was a very good year for Agri-Mark in which we generated $14.9 million in year-end profits from which we returned $5.6 million in cash back to our members,' says Agri-Mark CEO Paul P. Johnston.
Johnstons says that because the business was profitable throughout the year, the co-op was able to make two cash payments to farmers even before year-end, during a time when farm families really needed it. The third cash payment for year-end profits was just mailed to the co-op’s members this week.
Agri-Mark’s year-end profit allocation to its 1,250 dairy farmers from New England and New York is $.45 per hundredweight or roughly $.03 per gallon for all of the milk each farm family marketed through the cooperative during the 2009 calendar year. This represents earnings of roughly $9,000 for the average Agri-Mark member milking 100 cows.
Agri-Mark’s CEO says the financial results are particularly satisfying because during the past three years the business has generated a total of $45 million in year-end profits in periods of both high and low milk prices and in up and down economies.
“The strength and diversity of our farmer-owned business is evident,” notes Johnston.
In addition to the profits distributed in cash during the year, Agri-Mark farmers also received an extra $17.5 million in their monthly milk checks throughout 2009 for milk quality and other incentives that the co-op was able to negotiate with its customers and return directly to them.
Neal Rea, a dairy farmer from Cambridge, N.Y., who serves as the cooperative’s Chairman of the Board, says that during 2009 the Board of Directors and management felt very strongly the need to maximize cash distributions to farmer-members considering a continuation of historically low farm milk prices that has forced many farmers to go into considerable debt to keep operating.
“The excellent resiliency of our Cabot and McCadam brands in a declining market and our wholesale business have provided Agri-Mark members with a share of more than $32 million in profits and premiums this past year. We look forward to generating more money for our farmers in the years ahead,” says Rea.
The co-op’s Chairman says he feels good about the continued success of the cooperative’s business, but the Board of Directors and management clearly recognize the need to work with other groups to find ways to improve farm milk checks every month.
“We remain committed to pursue changes that result in the higher farm milk prices that our farmers deserve for providing our customers and consumers with superior quality, locally produced dairy products,” says Rea.
Rea admits that may likely take large scale changes to the way farm milk is priced in the U.S., but he says Agri-Mark remains focused on helping its Northeast dairy farm families not only survive, but prosper.
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Agri-Mark, with $655 million in 2009 sales, markets more than 300 million gallons of farm fresh milk each year for more than 1,250 dairy farm families in New England and New York. The cooperative is headquartered in Methuen, Mass., has been marketing milk for dairy farmers since 1913, and also actively represents their legislative interests in the Northeast and in Washington, D.C.
Agri-Mark owns the award-winning Cabot brand of Vermont Cheddar, butter and other dairy products in addition to the McCadam brand of New York Cheddar, Muenster and other cheeses. Cabot won the award of World’s Best Cheddar in 2006 for the second time and McCadam won the award of America’s Best Cheese in 2007. Agri-Mark has also invested in operations to manufacture and market valuable whey proteins globally and sells fresh fluid milk from its farmers to the region's largest dairy processors. For more information about Agri-Mark, visit our web site at www.agrimark.net.