Dairymen Middle Atlantic Division Posts Positive Y
JOYCE BUPP
York Co. Correspondent
HAGERSTOWN, Md. A
“good year” Is how Fred Butler
described the 1993 corporate fis
cal picture for members of the
Middle Atlantic Division of
Dairymen, Inc., during die dairy
cooperative division’s annual
meeting recently at the Hager
stown Sheraton Inn.
“We expect to show a profit of
$3.2 million on operations, have
put over $2 million more into cash
flow, added over $1 million to
member equity, reduced our over
all debt significantly, and raised
our financial credit rating,” said
Butler. The Inwood, W.Va., dairy
farmer is president of the Middle
Atlantic Division, with offices at
Sykesville, Md., serving members
horn Delaware, Maryland, Pen
nsylvania. and West Virginia.
Butler noted that the dairy
industry continues to consolidate,
losing an estimated 17 producers
per day across the country. He
predicted that by the turn of the
century, only 95.000 dairy farmers
will be producing the nation's
milk supply.
As dairy farmer numbers
shrink, it is increasingly important
that dairymen be unified, Buder
reminded the gathering of mem
bers and guests.
“Our goal is to get the govern
ment out of the so-called ‘subsidy’
to the dairy industry and let us far
mers control our own future
excess supply of milk,” he said.
Butler reviewed the present
“self-help” program proposed by
the National Milk Producers Fed
eration, noting that the comprom
ise proposal is an effort to bring
together advocates and opponents
of two-tier supply management
He that “for every cent
of assessment from producers, we
can put SO cents back into the milk
check.” Producers who did not
make any more milk than they did
in the previous year would have
their assessments refunded under
the self-help proposals. The prog
ram would be farmer controlled.
Butler also touched on the
North American Free Trade
Agreement (NAFTA), calling it
“good for agriculture.” While
industry favors NAFTA, labor
does not Butler said. With the
world ready to supply the needs of
the Mexican market he stressed
that time has come to proceed with
implementing the trade
agreement
Business activities of the divi
sion through the past fiscal year
were outlined by manager Boyd
M. Cook. Code said memberships
Mike and Donie Blue will represent the Middle Atlantic
Division at the Dairymen, Inc., Young Dairymen
competition.
manager Boyd Cook: "Indus
try leaders need to look at
possible ways to decouple
Class l and Class ll pricing
from the M-W price.”
Fred Butler, Middle Atlan
tic Division president: “The
dairy Industry Is losing 17
farmers every day.”
numbers have remained fairly
constant, profits were shown in
both the division’s hauling and
supply services, and employee
retirements and realigning of
responsibilities have resulted in
overall cost savings.
Because of federal budget man
dated fuel tax increases and use of
low-sulfur fuels, the cost of diesel
for milk hauling is expected to rise
as much as five cents. Cook
warned that, after several years
with no increases in hauling, divi
sion milk pickup costs would like
ly rise a cent or two.
During the open forum
portion of the Dairymen divi
sion meeting, Franklin Coun
ty dairy producer Robert
Grove questioned the possi
bility of establishing a
farmer-funded national fund
that would help support milk
powder movement to needy
countries In cooperation
with church and community
James Mueller, Dairymen
CEO: “Our biggest challenge
continues to be getting the
Industry to work together.”
“Industry leaders need to look
at possible ways to decouple Class
I and Class II pricing from the
M-W price,” said Cook. He
explained that fluid milk and soft
dairy products yogurt, ice
cream, and cottage cheese—have
a standard consumer market value
and should not fluctuate widely as
they do under the current
Minnesota-Wisconsin-based pric
ing. The M-W has been extremely
volatile through the past year, with
counter-seasonal increases- in
cheese prices through spring
months and a steep drop in June.
Prices began another steep climb
upwards in September.
Cook reminded producers that
dairy support costs to the govern
ment have dropped dramatically,
from $2 billion in the early 1980 s
to less than $3OO million, while
food stamps and other feeding
programs now account for more
than half of the United States
Department of Agriculture’s
(USDA) budget
While federal estimates of sur
pluses earlier in the year were pre
dicted at more than 7 billion
pounds a level which would
trigger additional dairy farmer
assessment! to meet Gramm-
Rudman budget-cutting mandates.
- both division president Butler
and manager Cook predicted the
surplus would not surpass the
lancwtar Farming, Saturday. Octobf 23, lHfrA33
Maryland State Dairy Princess Dawn Downey offered a
milk toast to Dairymen members and guests attending the
division annual meeting.
added assessment-triggering 7 bil
lion pound level.
Cook further updated members
on the 26-member Maryland
Dairy Task Force working toward
the goal of establishing a Mary
land Milk Commission. Ultimate
ly. Cook said, a Maryland Milk
Commission could cooperate with
similar boards already in Pennsyl
vania and Virginia to provide sta
bility to the dairy industry through
the entire region.
“Fiscal 1993 was a turnaround
year for Dairymen,” according to
James Mueller, the cooperative’s
chief executive officer. Mueller
reviewed the corporate financial
picture and outlined stratetic plan
ning of the Louisville, Ky.
based dairy cooperative. Sales
increased, about $8 million in debt
was reduced, and an equity
revolve is probable for December
1.
Mueller told members that
negotiations continue between the
cooperative’s Flav-O-Rich pro
cessing subsidiary and potential
buyer Dean Foods of Chicago,
with the proposal currently under
review by die Department of Jus
tice. Any transaction between the
two companies would need
approval by the boards of both.
The dairy cooperative’s five
cheese and butter-power manufac
turing plants are not part of the
negotiations.
Strategic focus continues on
areas such as pooling procedure
studies, curtailment of expenses
and overhead, and continuing to
be a service and quality supplier to
customers.
Efforts continue, Mueller said,
on establishment of a Dairy
Cooperative Marketing Associa
tion (DCMA) in the Southeast
which would operate similarly to
the Middle Adandc Cooperative
Milk Marketing Association
(MACMMA) to aid in stabiliza-
tion of raw milk pricing. Because
of lack of cooperation by three
processors with independent sup
plies, DCMA’s success in holding
prices has been limited.
“Our biggest challenge con
tinues to be getting the industry to.
work together," said Mueller.
“Partnerships must prevail
between suppliers and processors.
Cooperatives will be increasingly
important in the future to provide
such services as milk procure
ment, balancing surpluses,
importing milk into deficit areas,
and quality programs.”
The Dairymen, Inc., CEO
encouraged members to plan to
attend the cooperative’s corporate
annual meeting, scheduled for
December 9-10 at Opryland Hotel
in Nashville, Tenn.
Recognition was extended to
the Middle Atlantic Division’s
1993 Young Dairymen couple,
Mike and Dorrie Blue. Shenan
doah Junction, W.Va. The Blues
and their two young sons are part
of a family ISO-milking head and
900-acre crop operation and are
active in numerous community
and church activities. Mike and
Dorrie will represent the Middle
Atlantic Division at the coopera
tive’s Young Dairymen competi
tion during the December annual
meeting.
During the annual business
meeting, four directors to the
Middle Atlantic Division board
were ratified for three-year terms.
Re-elected to board terms were
Jesse I. Burall, Monrovia, Md.,
District 4; J.A. Bupp, Seven Val
leys, Pa., and Paul R. Waybright,
Gettysburg. Pa., both of District 7.
Edward N. Lipscomb, Eglon,
W.Va., was newly elected to rep
resent District 11. Recognition
was extended to Bill Jackson,
New Salem, Pa., former District
11 director who retired from the
board.
It does
a body
good.®