The head of a new Southeast dairy cooperative is hoping to preserve markets for more than 100 independent dairy producers, about 40 of whom are in Virginia.
The newly formed Appalachian Dairy Farmers Cooperative is expected to begin operations June 1.
“This new structure became necessary because of the current imbalance between the milk supply and the demand for milk, which has driven milk prices received by dairy farmers to levels that are below the cost of production,” Gary MacGibbon, president of the Appalachian Dairy Farmers Cooperative board, said in a press release earlier this week. “Events over the past few months in the dairy industry have shown just how vulnerable dairy farmers are to changing market conditions. While formation of this new cooperative will not improve prices received by dairy farmers for their milk, it will help members of ADFC retain markets for their milk.”
The formation of the cooperative comes after months of meetings that began in February with Piedmont Milk Sales. MacGibbon said Piedmont marketed milk for as many as 120 independent dairy farmers in Tennessee, Virginia and the Carolinas but was rapidly losing money as a result of the struggling dairy market.
He said the cooperative entered into an agreement with Piedmont to market its milk as well as its day-to-day operations under direction of the cooperative’s board of directors.
MacGibbon said informational meetings with prospective cooperative members will be held throughout the month, including two meetings next week in Wytheville, Virginia. He said the meetings are only open to prospective cooperative members.
MacGibbon said the Southeast dairy industry is struggling as a result of over production of milk, lower over-order premiums and falling local demand.
He said the cooperative might be willing to take in at least four Tennessee farmers who were recently let go by Deans Foods as that company has reduced the number of farmers it gets its milk from.
Keeping the cooperative small is one way MacGibbon said will enable it to compete with larger cooperatives such as Dairy Farmers of America, and Maryland & Virginia.
“We don’t have the overhead. DFA and Maryland & Virginia have big overheads. We’re hoping to keep it simple. We’re local,” he said. “The independent market is out. That’s the way it is in the Southeast. We just feel like we can offer a better pay price than the (larger) co-ops. I think at the end of the day everybody is looking for security.”
Source: Lancaster Farming