COCKE YSVILLE, Md. - Calling the dairy business a “mature industry,” Jim McDowell says milk cooperatives must in creasingly be involved in the total food industry, rather than focusing on marketing milk. Y ield. St andabilit y and Disease Resistance JOSEPH MATEJIK 5901 Mechamcsville Road Mechanicsville, Pa 18934 (215)297-5155 RHOADS MILLS INC W Snyder & High St Box 24 Selmsgrove, Pa 17870 (717)374-8141 RICHLAND F EED CO. 20 N Main Street Richlandtown, Pa 18955 (215) 536-2555 EARL R. WEAVER FEED MILL RO 2 Box 37 Honey Brook. Pa. 19344 (215)273-3958 UMBERGER'S OF FONTANA, INC. RD 4. Box 545 Lebanon Pa 17042 (717)867-2613 f * Dairy Business Termed McDowell is chief operating officer of Dairymen, Inc., third largest milk cooperative in the nation, annually marketing over 5.5 million pounds of milk from 6,500 member families, and headquartered in Louisville, Ky. HT6SOA A Winner In HT6SOA HYBRID SEED CORN ANDREA SON INC. Montrose, Pa. (717) 278-1131 F.M. BROWN'S SONS INC Sinking Spring. Pa (215)678-4567 Fleetwood, Pa. (215)944-7654 Birdsboro, Pa. (215)582-2741 HONESDALE FEED BIN INC. Honesdale. Pa. (717)253-1598 TYRONE MILLING INC RO 1 Box 34A Tyrone, Pa. 16686 (814)684-3400 Also Available At Our Tyco Farm Store. Route 22, Huntingdon. Pa He spoke during the annual meeting of the Middle Atlantic Division of Dairymen, Inc., held last Saturday at the Hunt Valley Marriott Inn. Middle Atlantic Division, headquartered at Sykesville, Md., This versatile 115 day hybrid can be planted from Connecticut to North Carolina, and perform! HT6SOA exhibits excellent levels of grey leaf spot tolerance. Make HT6soAyour winner! TEST RESULTS 5 Locations, 2 Year's Data HT6SOA BUSHELS iaa.3 PER ACRE Bn AT 15.5% r«alCustom F annul* ladi iqu dFutilizersl ‘Mature Industry 9 was the former Maryland Cooperative Milk Producers, and has a current membership of 870 dairy farm families in Delaware, Maryland, Pennsylvania, Virginia and West Virginia. A mature industry, according to P 0 BOX 366 BUFFALO N V 14240 <716)825 3300 CLARENCE MARTIN 35 Peach Lane Lancaster, Pa. 17601 (717) 569-6343 BLUE MT. VIEW FARMS RO 3, Box 604 Annville, Pa 17003 (717)867-2890 THOMAS J. BAIR RD 2 Box 196 Wnghtsville, Pa 17368 (717)252-3342 CLAIR BUSH RD 1, Lykens, Pa. 17048 VERNONARENTZ 474 Christ Church Rd Littlestown Pa 17340 C 717) 359-4689 EARNEST LANT2 Coatsville Pa 19320 (215)857 5933 AB6?, t y'dnjM>*S l» Lancaster Farming, Saturday, November 1,1986-A33 McDowell, is one with a stable demand for the product, depressed margins, under-utilization of available production facilities, and disappearance of competitors, all symptomatic of dairying. To overcome economic stagnation which accompanies this industry maturing, McDowell sees dairy cooperatives undergoing struc tural changes, diversifying, and developing specialty, or “niche” markets. “And there’ll be some weird marriages and relationships developed in dealing with this maturing industry,” said the Dairymen operations officer, concurring with similar predic tions made by division president Fred Butler. Co-ops will move to horizontally integrate through partnerships and joint ventures, such as a present one taking shape at Decatur, Ala., between Dairymen, Inc., and H. P. Hood to develop and market a iong-shelf-life ice cream mix for the fast food industry. First product from the joint venture is expected to enter the market about the first of the year. Vertical integration, or taking product more directly to con sumers, has been the object of Dairymen’s Ultra-High-Tempera ture processing facility at Savannah, Ga., and the wholly - owned milk and dairy foods processing and sales subsidiary, Flav-O-Rich. With a combined sales distribution system that can reach 28 percent of the nation's population, and a fleet of up to 2,800 vehicles, Dairymen is looking toward moving companion-type commodities for better utilization of production and distribution facilities. Specialty, or “niche” markets, include value added products, such as Dairymen’s Farm Best UHT long-shelf-life milk, adds Mc- Dowell. Other related long-shelf life items being packaged are Hi-C drinks for the Coca-Cola company, and Dairymen’s own Nutri-Treat, a fortified dairy drink. McDowell sees no appreciable rise over the next three years in the prices farmers will receive for their milk. While supply management is gaming attention by many in the industry, Dairymen’s position is to give the present program a chance to work “Better the industry be market driven, rather than government driven,” says McDowell, citing trends which followed the con version of tobacco growing to quotas, and in which “farmers got out of the tobacco business and into the base business." A continued strong financial structure undergirds member equity in Dairymen, according to chief financial officer Jim Mueller. He reported both Dairymen and Flav-O-Rich as in the “black,” with the all time high asset level of $252 million. Member equity totals $B7 million, with $57 million long terms debts, and a continued Double A credit rating from Standard and Poor, allowing the cooperative to borrow at low-risk rates and reduce finance costs bv a million dollars annually. Some 5.6 billion pounds of member milk was marketed through the fiscal year, up 3 percent in spite of both the severe drought and heavy buyout signup in the Southeast. Total con solidated sales were at 5987 million, the first time in five years that sales have dropped below the billion dollar level, but attributable to lower product prices. The 1986 fiscal year end figures tally to a $8.6 million net margin, with $l5 million to be returned to members in the five-yeai revolving equity program. While we did not yet get costs down as low as we wanted,” noted Mueller ‘it is the 10th out of 12 years that more than 97 cents of every dollar of raw milk sales is