Dairy Farmers of America (DFA), a leading cooperative owned by dairy farmers across the United States, has established itself within the dynamic dairy industry. Recognizing the importance of collaboration in a competitive market, DFA has developed a unique business strategy that promotes the interests of its more than 13,000 member farmers and caters to other players in the dairy domain. DFA’s strategy encompasses several key elements, such as:
- Fostering farmer collaboration who collectively produce nearly 30% of the nation’s milk supply,
- Enhancing operational efficiency
- Developing strong partnerships, and
- Pursuing innovation in dairy products and processes.
This article delves into DFA’s historical milestones, examining how the cooperative has grown and adapted to industry changes. In addition, we will also be analyzing their current market position, future strategies, and initiatives, along with assessing how they plan to maintain their competitive edge and contribute to the sustainable growth of the dairy industry.
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Key Highlights
- DFA has launched various multi-year strategies such as milk marketing, member services, commercial investments, and leadership to provide value to its family farm owners.
- The research focus of DFA includes streamlining on-farm cow care, producing green hydrogen using cow manure, introducing hardware-free Tech For Monitoring The Herd, and tackling cattle mastitis.
- In 2022, DFA brought many products into the market, including a new easy-to-spread butter by Plugrá and Cheeseboard Snacking Bar.
- DFA introduced CoLAB Accelerator Program in 2017, a 90-day immersive program to make its operation smooth. Companies such as Cattle Scan, Hago Energetics, ReproHealth Technologies, Lyras, CattleEye, etc., participated in CoLAB Accelerator Program in 2022 and 2021.
- Other companies innovating in DFA’s domain include Nestlé USA, Danone North America, Schreiber Foods, Inc., Kraft Heinz Co., Conagra Brands, Prairie Farms Dairy, Land O’Lakes, Inc., and many more.
- DFA offers its products and services to various popular clients worldwide. Some of which include Starbucks, Dean Foods, Kroger, Chobani, Glanbia, Nestle, Frito-Lay, Kraft, and Unilever.
- DFA has undertaken several acquisitions of companies such as SmithFoods, Dean Foods, etc., and investments in recent years as part of its market development.
- The net sales of DFA have increased by approximately 40% from 2015 to 2021 and were valued at $24.5 billion in 2022.
- As a part of the growth strategy, DFA has collaborated with various companies such as Pizza Hut, Bel Brands, Good Culture, Team Ag, Inc., etc.
- In place of DFA’s future goal, the company aims to reduce emissions by 30% across their industry by the end of 2030 through transportation savings, plant optimization, healthy soil, and healthy cows.
Business Strategy of Dairy Farmers of America
DFA’s business strategy is based on Efficiency, partnerships, and innovation.
Efficiency is the core pillar of DFA’s business strategy. The cooperative strives to optimize its operations and supply chain to minimize costs, reduce waste, and improve productivity. By employing state-of-the-art technologies, implementing sustainable practices, and investing in infrastructure, DFA aims to streamline processes and create value for its members. This emphasis on efficiency enables the cooperative to generate competitive returns for farmers and maintain a sustainable business model in the face of market fluctuations.
Partnerships form an integral part of DFA’s strategy as well. The cooperative collaborates with industry stakeholders, including retailers, food service providers, and other cooperatives, to build strong relationships and create opportunities for its members. These partnerships help DFA secure market access, expand product distribution channels, and ensure the long-term viability of the cooperative. Therefore, by forging strategic alliances, it leverages its collective strength to negotiate favorable contracts and explore new avenues for growth.
Innovation, the last pillar, serves as a driving force behind DFA’s business strategy. The cooperative continually seeks to develop new dairy products, improve production techniques, and explore emerging technologies to enhance its members’ overall sustainability and profitability. By staying at the forefront of innovation, DFA is trying to adapt to the changing consumer preferences, market trends, and regulatory requirements, positioning itself as a leader in the dairy industry.
According to Randy Mooney, Chairman of DFA, “Our strategic plan is not trying to predict the future. It is making informed choices and setting our priorities.”
Therefore, it is clear that the company strives to enhance net returns at the farm by establishing and strengthening milk markets and marketing relationships. The company also invests in commercial enterprises that add value to their members’ milk and offer services and activities that bring actual economic worth to their members.
Strategic Pillars of DFA
DFA’s goal and vision are supported by four strategic points – milk marketing, member services, commercial investments, and leadership. These four points define their cooperative business model, and this comprehensive approach enables the organization to maximize the value it can provide to its family farm owners.
Milk Marketing
A core business of DFA is milk marketing, which is a common goal for all its members. This strategy ensures good marketing of members’ milk and pays them a competitive price. Moreover, DFA’s diversity, as evidenced by its members’ different farming models and client base, aids the organization in resolving any problems. These concerns relate to premium pricing, long-term client relationships, and short-transactional sales. It also identifies strategies to derive value for members from these demands rather than simply adding costs.
Commercial Investments
DFA has expanded its commercial investment portfolio over the last decade. Their investments span the entire dairy product spectrum, selling through several channels and collaborating with clients to engage millions of consumers every day. By investing in high-milk-utilization factories, such as cheese and ingredient powder mills, the company ensures a place for their members’ milk. The firm generates lucrative returns from its commercial business segments while adding actual value to its members’ milk.
Member Services
DFA’s size and operational footprint allow it to provide services that make farming more accessible and profitable for its members. It also provides members with lower-cost products and services and various partner discount schemes.
Leadership
DFA has established itself as one of the market leaders on a local, regional, national, and global scale. To maintain that position, it is important that the cooperative continues to discover, develop, and assist prospective future industry leaders – both members and staff. (Source)
Research Focus of DFA
The Dairy Farmers of America (DFA) has been seeking firms with Ag-tech applications or innovations connected to any aspect of the dairy value chain. It includes animal health, farm data management, livestock health and management, supply chain optimization, and sustainability. DFA has been utilizing the various new technologies of the startups participating in the CoLAB Accelerator Program. (Source)
Let’s take a look at a few examples.
Streamline On-Farm Cow Care
Cattle Scan, one of the DFA’s 2022 CoLAB Accelerator program partners, assists dairy producers in tracking dairy cows’ multiple health and reproductive characteristics to optimize herd management and increase milk output. The process operates through a battery-powered gadget implanted inside a cow’s stomach, which sends real-time updates to a dairy farmer’s smartphone. The Cattle Scan’s technology enables a farmer to detect herd problems early on, allowing for early intervention and preventative treatment. As a result, milk output can be saved, treatment costs are reduced, and cow recovery time is shortened.
“The biggest takeaway from the CoLAB Accelerator is networking and connectivity with industry players. I believe DFA’s CoLAB Accelerator has a unique proposition because of its connection to DFA as a whole Cooperative,” stated Denis Tokarev, Co-Founder, and Chief Executive Officer of Cattle Scan.
As a result of this program, Cattle Scan got a deeper understanding of the dairy industry, support from DFA’s management, and access to the Cooperative’s professional network. (Source)
Cattle Scan’s Technology
Green Hydrogen Production Using Cow Manure
The product of Hago Energetics is a facility built on farms that uses the startup’s technology. Each facility decomposes leftover cow manure and feeds it into a biogas plant. It is subsequently turned into environmentally beneficial and profitable green hydrogen and carbon. The finished product is sold and converted into energy and fertilizer for nearby towns and properties.
According to Wilson Hago, Ph.D., Founder and Chief Executive Officer of Hago Energetics, “The best part about the CoLAB Accelerator program for us was the connections to DFA and its industry partners. DFA was instrumental in helping us connect with several biodigester companies.” (Source)
Hardware-Free Tech For Monitoring The Herd
CattleEye provides a livestock monitoring technology that monitors each cow’s well-being and performance using artificial intelligence and video analytics. The technology collects several data points in a single scan thanks to its usage of hands-free technology. CattleEye’s cloud-based platform employs artificial intelligence algorithms to learn how to recognize and track each cow. These insights are then delivered to a smartphone or integrated into various popular farm management programs.
CattleEye Insights
Tackles Cattle Mastitis
Veri Nano, a bio-nanotechnology firm, provides Veri Seal to aid in the prevention of cattle mastitis. Using technology and creativity, Veri Nano was founded by Guillermo U. Ruiz-Esparza and his associates Nathan Lee, Samson Afewerki, and Joseph Bonventre. Veri Seal has no antibiotics, is economical, and can be applied during a cow’s dry season. Its initial trials have shown that it is three times more effective than its competitors at avoiding mastitis. The Veri Nano team participated in the DFA’s 2021 CoLAB Accelerator program.
Veri Seal by Veri Nano
New Products, Services, and Inventions
While many people associate innovation with finding solutions to issues and exploring new ways of doing things, at DFA, innovation is ultimately about identifying opportunities. The company is devoted to achieving innovation in all aspects, from researching and producing new products for the market to integrating technology that promotes manufacturing efficiencies.
Products Brought To The Market By DFA – 2022
In 2022, Plugrá, a DFA-owned business, introduced a new spreadable butter produced with olive oil and sea salt. The new butter comes in a compact, table-friendly container. This product is ideal for individuals looking for softer butter for creamy spreading. (Source)
Plugrá Spreadable Butter
In 2022, Cheeseboard Snacking Bar provided consumers with a simple, protein-packed snack that can easily be taken anywhere. Each cheeseboard contains a platter of cheese, almonds, and dried fruit, and a single serving of this product contains two pints of milk and 17 grams of protein.
Alison Tetrick and the rest of the Cheeseboard team got the expertise and assistance needed and access to resources after participating in DFA’s 2021 CoLAB Accelerator. (Source)
Cheeseboard Snacking Bar – On-The-Go Eating
Products Brought To The Market By DFA – 2021
In 2021, DFA’s retail cheese store in Utah, The Creamery, introduced a novel green onion cheddar cheese curd flavor. The Creamery created three new curd sample flavors: habanero pepper, hatch pepper, and green onion. After The Creamery staff tried and voted on the three tastes, the green onion cheese curds were declared the winner.
Green Onion Cheddar Cheese Curds
In 2021, DFA created a novel product, Fireball Cinnamon Holiday Nog. This beverage contains milk from DFA’s family farm owners infused with the iconic Fireball cinnamon flavor. (Source)
Fireball Cinnamon Holiday Nog
Services Provided by DFA for Dairy Industry
Risk Management
DFA Risk Management, a Dairy Farmers of America division, is the dairy industry’s foremost risk management service, providing DFA members with unmatched options to manage income risk, pricing volatility, and cash flow.
It offers two kinds of programs: Dairy Revenue Protection (Dairy – RP) and a diverse line-up of forward contracting tools for the company’s members. DFA has customized its services to suit all comfort levels, from beginners to experienced veterans. (Source)(Source)
The company may assist its consumers in a variety of areas, including
- Understanding the customer’s milk check and milk basis
- Address how changes in dairy commodities affect customer prices
- Calculate the cost of protection for customers
- Identify unique pricing opportunities and many more. (Source)
Grazing
DFA Grazing is the Farm Services Division of the Dairy Farmers of America (DFA). DFA Grazing may assist DFA family farm owners in navigating and capitalize on opportunities on their customers’ land. Its goal is to assist its customers in achieving optimum pasture and animal performance, personal and business goals, and creating a more sustainable future for their enterprise.
DFA Grazing provides an individual consultation package that is adapted to the specific demands of each customer’s farm. Consultation services may include:
- Land management
- Seed planting
- Seasonal management
- Maximizing assets
- A typical consulting plan includes the following:
Insurance
The Agri-Services Agency provides DFA Insurance. It offers a wide range of low-cost, high-quality insurance programs designed to give agribusiness owners a competitive advantage and to assist them in attracting and retaining good staff. It is the nation’s first and only cooperative-driven insurance firm, with its goal and principles based on the farms and companies it insures. (Source)(Source)
DFA Insurance offers insurance coverage for various segments, which include:
- Health Insurance
It provides quality health care, which can aid in retaining good employees by offering various insurance products, including group health insurance, individual health insurance, dental, vision, and life insurance. (Source)
- Farm Insurance
- Workers’ Compensation
DFA Insurance programs offer superior loss control services, convenient claims management, and customizable features in this segment. (Source)
- Cyber Insurance includes
- Data recovery & recreation,
- System recovery & repair,
- Lost business income,
- Reputation management,
- Ransom & extortion payments,
- Data breach response expenses, and more. (Source)
- Employment Practices Liability Insurance
- Livestock Insurance
Farm Supplies
DFA Farm Supplies works with national vendors to provide members with the best items at low costs. The company offers everything, including feed and silage, to stall mats and headlocks.
The firm supplies include:
- Animal Health (Dewormers, Instruments, Prescriptions, Probiotics, Scour treatments, Supplements, Topical treatments, Vaccines, Vet wraps)
- Calf Care & Housing (Calf blankets, Calf hutches, Carts, Fence kits, Milk replacer, Wire panels)
- Barn Equipment (Heaters, Lighting Equipment, Stalls And Headlocks, Ventilation Equipment)
- Feed Commodities (Beet pulp pellets, Canola meal, Citrus pulp pellets, Corn gluten feed, Corn meal, Distiller grains, etc.)
- Milking Supplies and more. (Source)
Energy
DFA Energy is a part of Dairy Farmers of America’s (DFA) Farm Services Division. It assists DFA family farm owners in navigating the emerging renewable energy sector by appraising the risks and rewards of new technologies, funding opportunities, and other factors.
Dairy producers can receive assistance and advice regarding everything from energy conservation to energy production through DFA Energy. Furthermore, DFA Energy experts can aid in evaluating whether federal or state funds are available to assist with energy-related initiatives. Furthermore, it also offers solar energy, wind energy, etc. (Source)
DFA Energy has collaborated with EnSave, a renowned agricultural energy efficiency consulting organization, to provide its customers with agricultural energy efficiency audits. EnSave creates a tailored strategy with cost-effective ways for businesses to save money and energy.
It also concentrates on lighting systems, milk cooling, and other milking equipment in the customers’ operations. The services include updating to more efficient compact fluorescent lamps or LED lights, using a pre-cooler, or installing variable-speed drives or plate coolers. (Source)
Financing
Agri-Max Financial Services has provided Financing to DFA farmers for over 40 years. It has entirely focused on member farms, developing products and services tailored to the unique needs of the dairy business. (Source)
The company’s services include:
- Operating credit lines – The company’s operating lines of credit can offer customers a 12-month loan that can be utilized for crop inputs, significant feed purchases, and other large operating expenses throughout the year.
- Credit lines for capital – Customers can obtain loans from DFA Financing for 12 months, with flexible repayment options.
- Capital and real estate developments
Animal Nutrition
DFA Animal Nutrition calf milk replacer is formulated with ingredients derived from the milk of the company’s members.
It offers a variety of advantages, such as:
- Specially developed products made with milk-based DFA ingredients, resulting in great mixability.
- Protein and fat content can be adjusted to fit each customer’s demands.
- An exclusive blend of highly digestible protein and fat sources that promotes stature and lustrous hair coats by providing adequate energy and protein levels.
- It is balanced for optimal calf growth to produce the customers’ next generation of breastfeeding cows. (Source)
Acumen Detection
Acumen Detection provides fresh cow surveillance products to assist customers in properly managing their milk quality.
It collaborated with Cornell University researchers to create novel reagents (made in the USA) and incorporate Real-Time PCR (polymerase chain reaction) for specific, sensitive, and quick detection. It has five patents to its name, and through a distribution chain that includes Veterinarian’s Outlet, IBA, Diamond City Farm Supply, Leedstone, and Dairy Farmers of America, the company sells its goods to dairy producers, veterinarians, and milk laboratories in the United States, Canada, and Panama.
Acumen’s products portfolio includes Cleaning Lysis, Sample Cup Labels, Milk Lysis Reagents, Acumax Pipettors, Pipette Tips, Sample Cups, and PCR Reagents. (Source)
Empire Livestock
Empire Livestock Marketing is a marketer of livestock that specializes in dairy replacement auctions and feeder cattle auctions. It is dedicated to increasing customers’ earnings from livestock, equipment, and facility sales by providing the option to auction their goods. It has six marketplaces and a direct marketing facility across New York State.
Empire Livestock offers a full line of enhanced services:
- Weekly Commission Sales
- Feeder Cattle Auctions
- Monthly Heifer Sales
- Direct Marketing
- Cattle Sourcing
- Order Buying Services
- Complete Farm Dispersals
- Machinery Consignment (Source)
Dairy One
Dairy One is a non-profit organization administered by DFA that aims to assist farms in their success. It provides various tools and solutions to assist farms of all sizes in making more informed decisions. Soil analysis and pre-side-dress nitrate testing are services offered by its Agronomy Services. Furthermore, Dairy One’s Forage Laboratory analyzes feed, forage, manure, water, and plant tissue. In addition to this, DHIA Records & Milk Analysis provides information on DHIA testing, records, animal identification, and milk analysis for dairy cows and goats. (Source)(Source)
Dairy One’s services include:
- Agronomy Services
- Forage Laboratory
- DHIA Records & Milk Analysis
- Integrated Farming Solutions (Source)
DFA – Operation CoLAB Accelerator
DFA introduced CoLAB Accelerator, a 90-day immersive program that employs counseling and educational programming to promote and create Ag-tech startup companies. Moreover, through extra investment and support, the company has established long-term partnerships with several Accelerator startups.
“We know that new technologies and innovations are helping drive growth and efficiency on today’s farms. Our goal with this program is to help identify and build relationships with those ag-tech companies that can really benefit our farm family owners in solving problems and improving processes,” said Matt Musselman, Chief Operating Officer for DFA Farm Services.
DFA seeks firms with Ag-tech solutions or technologies that connect to any aspect of the dairy value chain, including animal health, farm data management, herd health and management, supply chain optimization, and sustainability. The DFA CoLAB Accelerator has collaborated with 32 firms since its inception six years ago and continues to engage with most of these companies in some manner.
94% of the alumni businesses are still in operation today. (Source)(Source)(Source)
The DFA’s CoLAB Conversations provide brainstorming sessions to tackle problems and discover real-world solutions for improvement. These sessions help to boost and develop ideas or inspire creative thinking within the startups joining the program. The present participants of the CoLAB Accelerator include Cattle Scan, Hago Energetics, Lemna, Lyras, ReproHealth Technologies, and Smack’d.
It utilizes the various technologies of the startups (participants) and incorporates them to produce various innovative products. Antibiotic alternatives, renewable or alternative energy sources, farm labor solutions, food waste technology, automation and robotics, on-farm connectivity, animal identification, and monitoring and animal transport systems are among the Ag-tech categories of particular interest to DFA. (Source)
CoLAB Accelerator Participants in 2022 and 2021
| Year | Company Name | Brief Information |
| 2022 | Cattle Scan | It is based in Canada and provides real-time monitoring technology to analyze individual cow biometrics, beginning with temperature. Farmers can improve the overall health of their herds by accessing data on a cloud-based platform. (Source) |
| Hago Energetics | It is based in California and seeks to assist farms, either cattle or dairy, in converting waste into fuel cell quality hydrogen through a patented carbon-negative technique that does not entail hydrolysis. This hydrogen is projected to be less expensive and has a reduced carbon footprint than existing technologies. (Source) | |
| Lemna | It is headquartered in Arizona and uses duckweed in a controlled growth system to give a comprehensive nitrogen management solution for agricultural wastewater. Duckweed has the potential to give farmers a new source of income. (Source) | |
| ReproHealth Technologies | Its headquarters are in Indianapolis, and it provides patent-pending equipment that takes IVF technology to the farm. The gadget has the potential to quadruple cattle embryo production while also lowering reproduction expenses. (Source) | |
| Lyras | The company, headquartered in Denmark, has developed a UV-light cold pasteurization system that consumes 90% less energy and 60% less water than standard pasteurization. (Source) | |
| Smack’d | The company is headquartered in Utah, and its goal is to create an adult chocolate milk beverage that is rich in protein, low in sugar, and caffeinated. | |
| 2021 | CattleEye | The company, based in the United Kingdom, intends to develop a deep learning, cloud-based AI platform designed to analyze visual images of cattle captured by industry-standard web cameras. The technology identifies individual animals autonomously to extract insights such as assessing gait, using mobility scores to track lameness, and other positive well-being indicators. (Source) |
| DairyOffice | This platform interacts with herd management software, sensors, feed systems, and ration formulation programs. It is intended to serve as a central repository for all data sets collected on a farm. The platform also controls the data collection and provides numerous spreadsheets and other analysis tools that are updated when new data is collected. | |
| H2Ok Innovations | The Massachusetts-based startup is a data analytics platform and proprietary sensor meant to assist manufacturers in gaining complete, real-time visibility into industrial liquid systems. It enables data-driven optimization activities to be used in manufacturing facilities and farms. (Source) | |
| VERI Nano | The company has created patent-pending nanotechnology used as a bovine teat sealant, disinfection, antimicrobial coating, skin care therapy, and wound care treatment. It is intended to be less expensive and more effective than current mastitis therapies. (Source) | |
| Saga Ventures | The company developed a single-serve cheese snacking bar to give healthy and satiating nourishment between meals. (Source) | |
| SimpliFed | The company uses current nutritional and microbial knowledge to create a superior, individualized organic formula and nutrition supplements to close the gap between mother’s milk and newborn formula. (Source) | |
| The Modern Milkman | The company has developed an online platform that provides fresh, regional-quality products delivered directly to the house. The subscription model connects farmers to their towns and communities to fresh, local products. (Source) |
DFA Focusing On Consumer Trends
Sustainability
Dairy Farmers of America practices sustainability while constantly improving and innovating. Its primary goal is to create solutions that decrease or eliminate carbon emissions, feed people worldwide, and help communities prosper. It backs the United Nations’ 17 Sustainable Development Goals (SDGs). DFA conducts research and seeks ways to increase the quality and productivity of food and farm animals while safeguarding the planet’s, people’s, and communities’ health and sustainability.
Randy Mooney, Chairman of the Board at DFA, states, “We work to preserve the ability to pass down the farm to the next generation — the best definition of sustainability.” (Source)
DFA’s Operations or Research Facilities
The facilities and manufacturing plants are a foundational element of DFA’s success. The innovative dairy-based food ingredients are manufactured and produced in each location.
Various Facilities of Dairy Farmers of America
The DFA comprises seven regions, each structured into districts. (Source)
In 2012, Dairy Farmers of America (DFA) built a new dairy ingredient production facility in Fallon, Nevada, in the United States. The factory processes 1.5 million pounds of raw milk into 250,000 pounds of dried dairy components daily. The capacity is expected to increase in the future. The new plant incorporates GEA Process Engineering’s dryer processing technology as it processes and manufactures dairy powder products using spray-drying technology. (Source)
List of Manufacturing Locations Based on DFA’s Product Type
| Sl. No. | Products | Locations in The United States |
| 1. | American Cheese | Zumbrota, Minnesota |
| Plymouth, Wisconsin | ||
| Monett, Missouri | ||
| 2. | Ingredient Plants | Hughson, California |
| Beaver, Utah | ||
| Fort Morgan, Colorado | ||
| Goshen, Indiana | ||
| Adrian, Michigan | ||
| Middlebury Center, Pennsylvania | ||
| Reading, Pennsylvania | ||
| 3. | Italian Cheese | Turlock, California |
| New Wilmington, Pennsylvania | ||
| West Middlesex, Pennsylvania | ||
| 4. | Canning/Ingredients | Ventura, California |
| Schulenburg, Texas | ||
| Winnsboro, Texas | ||
| Springfield, Missouri | ||
| Cabool, Missouri | ||
| Winthrop, Minnesota | ||
| Mechanicsburg, Pennsylvania |
Top Clients of DFA
Starbucks
In 2020, major food industry executives joined forces with Vanguard Renewables to form the Farm Powered Strategic Alliance (FPSA). The goal of FPSA is initially to advance long-term pledges to reduce or eliminate food waste and then repurpose what cannot be eliminated into renewable energy. Unilever, Starbucks, and Dairy Farmers of America are among the FPSA’s early adopters. The Farm Powered Strategic Alliance promises to decrease food waste in industry and the supply chain and repurpose any waste that cannot be avoided into renewable energy via Vanguard Renewables farm-based anaerobic digesters. Members of the FPSA will also start investigating decarbonizing their thermal energy usage by converting it to farm-derived renewable natural gas. (Source)
Fonterra Co-operative
DairiConcepts, Fonterra’s joint venture with Dairy Farmers of America, was founded in May 2000. While in 2003, Fonterra Co-operative Group and Dairy Farmers of America (DFA) signed a Memorandum of Understanding to regulate their future collaboration. DairiConcepts combined DFA’s manufacturing facilities with Fonterra’s technology advancements and superior R&D, maximizing both firms’ ability to reach worldwide markets and huge global clients.
The 50:50 joint venture manufactured various products, including specialty powders for newborn formula, high-end cheese powders for specialist dry blending, snack flavoring, prepared foods, and food service. The joint venture also engaged in the production of milk protein concentrate in the United States. Nestle, Frito-Lay, Kraft, Unilever, and Mead Johnson were among the customers. (Source)
Dean Foods
Dairy Farmers of America announced a $425 million acquisition of Dean Foods, America’s largest milk producer, in 2020. As part of the deal to acquire 44 of Dean’s facilities and other assets, the dairy cooperative would cover Dean’s liabilities.
Dean declared Chapter 11 bankruptcy in November 2019 after struggling to attract customers who have shifted to nondairy milk or private-label products. (Source)
Kroger
Kroger’s Atlanta Division joined forces with Dairy Farmers of America in 2020. The partnership was part of the new Great Georgia Give effort, led by Milk on My Mind, to send 24,000 half-gallons of local Georgia milk to first responders and healthcare workers in metro Atlanta. (Source)
Glanbia
Glanbia plc, Dairy Farmers of America, Inc. (DFA), the Michigan Milk Producers Association (MMPA), and Foremost Farms USA announced plans in 2017 to form a joint venture to build and operate a new cheese and whey production facility in Michigan. According to the proposal, Glanbia, an Irish corporation, held 50% of the joint venture, with the remaining 50% owned by DFA, MMPA, and Foremost Farms.
These farms provided all milk required by the factory, while Glanbia was fully responsible for all business commercial, technical, and operational aspects. (Source)
Acquisitions or Investments Made By DFA
Dairy Farmers of America has acquired eight organizations in the past few years. (Source)
Collaborations
DFA and SmithFoods
Dairy Farmers of America completed the acquisition of two extended shelf-life (ESL) production plants from SmithFoods in August 2022. These facilities are located in Richmond, Indiana, and Pacific, Missouri. They operate as Richmond Beverage Solutions and Pacific Dairy Solutions under the DFA Dairy Brands business.
Pat Panko, Executive Vice-President of DFA and President of DFA Dairy Brands North, states, “There is increasing consumer interest in extended shelf-life dairy products, and this acquisition aligns with our strategy to increase commercial investments and expand our ownership in this space. (Source)(Source)(Source)
DFA and Dean Foods
In 2020, Dairy Farmers of America acquired Dean Foods for $433 million. Dean Foods’ assets, rights, and 44 facilities were acquired. This agreement was approved by the Department of Justice and was completed to avoid Dean Foods’ bankruptcy.
According to Eric Beringause, President and Chief Executive Officer of Dean Foods, “We are pleased to complete these transactions, which maximize value for our stakeholders and will enable substantially all of our businesses to continue operating and serving customers across the country.” (Source)(Source)(Source)
DFA and St. George Manufacturing Facility
Dairy Farmers of America later acquired a sizable chunk of Dean Foods’ assets, including the St. George manufacturing facility. Dean Foods has owned the plant since 2014 and previously served as an ice-cream-producing facility for Blue Bunny. DFA currently employs 108 employees in the St. George area. It provides competitive remuneration beginning at $19 per hour and numerous opportunities for promotion. The cooperative has four manufacturing sites in Utah and 86 around the country.
DFA and Agropur’s St. Paul, Minnesota Facility
In 2018, Dairy Farmers of America (DFA) completed the acquisition of Agropur’s St. Paul, Minnesota plant. DFA’s acquisition aided its increased shelf-life capabilities and the introduction of aseptic processing into its commercial portfolio. The factory produced a variety of fresh, extended shelf-life, and aseptic dairy products For well-known grocery store chains and organic milk brands.
Pat Panko, Executive Vice-President of DFA and President of DFA Dairy Brands North, states, “This acquisition offers an opportunity to grow our customer base while strengthening our processing capabilities for existing customers and diversifies our product portfolio.” (Source)(Source)
Market Value of DFA
Dairy Farmers of America Inc.’s (DFA) global net sales have increased yearly since 2018. In 2021, net sales of DFA were valued at $19.3 billion. There has been an increase of nearly 40% in net sales since 2015. There was also an increase of around 7.8% in net sales from 2020 to 2021. The rise is due to an entire year of operations of the facilities acquired due to Dean Foods’ bankruptcy, as opposed to a partial year in 2020, as well as a higher all-milk price in the United States. In 2021, the average price paid to DFA members was $18.37 per hundredweight, up from $17.79 in 2020. (Source)(Source)
DFA’s Revenue During the Period 2015-2021 ($Billion)
Through its integrated operations, DFA controlled the marketing of 65.5 billion pounds of milk for members in 2021. This accounted for around 29% of total milk production in the United States.
In 2021, $47 million of $71 million in cash was delivered to members, with the remaining $24 million representing the cash part allocated as patronage dividends.
In 2021, Dairy Farmers of America reported a net income of $199 million, up from $171 million in 2020, an increase of $28 million or 16.4%. Such an increase in net income was primarily due to reduced general and administrative expenditures and other expenses. In 2020, the net income increased from $83.2 million in 2019 to $171 million, mainly due to lowered milk prices. (Source)(Source)
DFA’s Net Income During the Period 2015-2021 ($Million)
Top Partnerships Made By DFA
DFA and Pizza Hut
In 2022, Dairy Farmers of America collaborated with Pizza Hut (Yum! Brands). Pizza Hut has begun coordinating with DFA and dairy suppliers to engage interested dairy farm families in the cooperative dairy project. The company participated in annual farm-level greenhouse gas and energy footprinting through the farmers assuring responsible management and environmental stewardship program (FARM ES). By the end of the three years in 2025, Pizza Hut hopes to have sourced 50% of the dairy used to manufacture its pizza cheese from dairy farms participating in the FARM ES initiative.
In addition, the farms can apply for funds to develop sustainable projects while actively recruiting DFA members throughout the cooperation. Farmers participating in the program can adopt other techniques and technology, such as feed management innovations, energy-efficient lighting, and SCiO cups.
Hansel New, Director of Sustainability Programs at DFA, states, “In 2020, Dairy Farmers of America became the first U.S. dairy cooperative to set a science-based target to reduce both direct and value chain greenhouse gas emissions, and this partnership with Pizza Hut and Dairy Farmers of America is an important piece in those continued efforts……….to advance environmental stewardship while reducing farm-level greenhouse gas emissions.”
DFA and Bel Brands
In 2022, Dairy Farmers of America collaborated with Bel Brands as part of their sustainable milk cooling pilot program, which began in 2021. The collaboration aided in implementing energy-efficient and cost-effective on-farm milk cooling systems. This included the installation of new natural well water and forced air barn cooling systems on an Iowa DFA-member dairy farm that supplies milk to Bel Brands. Adopting these cooling systems resulted in a 6% reduction in the dairy’s electricity usage over a year, while milk production grew by 4%.
Hansel New, Director of Sustainability Programs at DFA, states, “Sustainability has been important to our farm families long before it was a buzzword, as taking care of their animals and the land is their future and livelihood. Partners, like Bel Brands, are helping bring technologies to our farms to help reduce their environmental footprint and climate impact.” (Source)
DFA and Good Culture
In 2021, Dairy Farmers of America collaborated with Good Culture to launch the Path to Pasture program, which helps boost soil health and pasture utilization on family dairy farms. In collaboration with DFA’s sustainability team and associated nonprofits, this program leveraged Good Culture funds to provide farmers with education and access to sustainable, regenerative agriculture farming practices that are critical in delivering nutrient-dense foods to the masses. This program was available to Minnesota and Wisconsin farmers interested in improving soil or pasture health.
Jesse Merrill, Founder of Good Culture, states, “Through the Path to Pasture program and our partnership with DFA, we aim to support farmers by providing them access to regenerative agriculture farming resources which will create healthier soil; grow more nutrient-dense foods; ensure that our animals are outside on pasture; and sequester carbon.” (Source)(Source)
DFA and Team Ag, Inc.
Dairy Farmers of America (DFA) collaborated with Team Ag, Inc. to provide free consultations with qualified agronomists in select parts of Pennsylvania to design a tailored soil health plan for the farm. These free consultations are made available by DFA clients Nestle and Barry Callebaut, who share a passion for developing regenerative agriculture practices in the dairy sector. The company also provided ongoing educational opportunities and tools for program extension to farms engaged in the Soil Health Pilot Project. (Source)
Dairy Farmers of America always look for new and innovative methods to conserve resources, decrease waste, and work more efficiently. As sustainability leaders, the company is committed to achieving a net zero or net negative carbon impact for its Cooperative and the United States. DFA and the U.S. dairy industry have paved the way in resilient agriculture methods, producing 60% more milk with 30% fewer cows over the last 50 years. This milk has been made available to more individuals through the National School Lunch and Breakfast Program, as well as community partners such as Feeding America®, to ensure that all families obtain the nutrition they require. (Source)
Future Outlook of Dairy Farmers of America
DFA aims to reduce carbon emissions by 30% across their industry by the end of 2030 through transportation savings, plant optimization, healthy soil, and healthy cows. According to David Darr, Senior Vice President and Chief Strategy and Sustainability Officer at DFA, “Our dairy farm families have always been great stewards of the land and environmentally focused because it protects the land for future generations. While the dairy industry, from farm to manufacturer, only contributes about 2% of total U.S. greenhouse gas emissions, we know it’s imperative to keep improving and improving. So, we’re proud to take action and set this science-based target, which will help us further reduce our carbon footprint and do our part in caring for our planet.” (Source)(Source)(Source)
Moreover, the company’s support of the Paris Agreement represents its greater goal of keeping global warming below 2 degrees Celsius by having its targets approved by the Science Based Targets program (SBTi).
Furthermore, DFA’s goal is consistent with the efforts of the Innovation Center for US Dairy and its goals for the US dairy industry to be carbon neutral or better by 2050. The company made progress toward the initiative through new projects and pilot programs, such as adopting renewable energy technologies, using anaerobic digesters, and creating regenerative agricultural pilot programs, among other things. Dairy Farmers of America also emphasized its commitment to monitoring and validating its success by collaborating with third-party organizations that make the corporation accountable and transparent about its sustainability activities.
In a nutshell, many innovative strategies and collaborations can be expected from Dairy Farmers of America, which means you must stay updated with their future plans as their competitor.
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Authored by: Vipin Singh, Marketing
Edited by: Moksha Jain, Marketing
