April 3, 2015
Methuen, Mass. - Agri-Mark farmers received strong milk prices in 2014 and their co-op also paid them a record $25 million in monthly premiums for milk quality and other incentives. However, Agri-Mark felt the pinch of falling dairy commodity prices at the end of the year and was forced to write down the value of its inventories of dairy products which resulted in a year-end loss, its first in nearly a decade.
“Fortunately, we have earned several years of record profits and have deliberately put aside for a situation just like this loss, so our farmers will not be affected,” says Neal Rea, a dairy farmer from Cambridge, N.Y., who serves as Chairman of the Board of Directors. “During 2014 our Cabot brand continued to grow in sales and profits and our McCadam Cheese brand also did well, which bodes very well for our future. We are also very pleased that we were able to pay out $25 million in premiums to our members to help them through the year.”
Agri-Mark officials say there will be no assessment on its farmers to cover the $2.3 million loss and it will be business as usual for 2015. The milk marketing cooperative was having a good year right up until the end of 2014, when rapidly falling U.S. milk and dairy product prices forced it to write down the value of the millions of pounds of dairy products it had in inventory, particularly nonfat dry milk and butter.
Even though it was a good year for local Agri-Mark farmers with high milk prices and record monthly premiums, the entire dairy industry is still in turmoil due to the falling prices caused primarily by increased U.S. milk production and weak dairy exports. No one knows how low milk farm prices may fall in 2015. Many dairy companies and cooperatives faced record losses, but Agri-Mark’s active dairy product hedging program prevented the company from experiencing a much larger loss.
“The wholesale side of our business did not do well, but the good news is that our consumer brands continue to grow in sales, profits and market penetration,” says Richard Stammer, Agri-Mark CEO. “Moving forward, our business is financially strong and Cabot’s new Legacy line of cheeses continues to expand throughout the country. We are well positioned to continue our record of innovative marketing and profitability for our farmer-owners.”
Agri-Mark, the premier dairy cooperative in the Northeast, had $1.1 billion in 2014 sales and markets more than 336 million gallons of farm fresh milk each year for 1,200 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 actively represents their legislative interests in the Northeast and in Washington, D.C. Agri-Mark farmers own the award-winning Cabot brand of Vermont Cheddar, butter and other dairy products in addition to the McCadam brand of New York Cheddar, Pepper Jack and other cheeses. Agri-Mark has also invested in operations to manufacture and market valuable whey proteins globally while also marketing fresh fluid milk from its local farm families to the region's largest dairy processors. For more information about Agri-Mark, visit our web site at www.agrimark.coop.