Members of the St. Albans Cooperative Creamery, a century-old dairy cooperative in Vermont, will vote later this month on whether to merge with the nation’s largest dairy cooperative, Dairy Farmers of America. But even as low milk prices and ongoing consolidation have threatened the region’s dairy farmers, St. Albans’ members are split on whether linking up with DFA will address their woes.
In late June, the St. Albans board recommended that the cooperative merge with DFA. St. Albans’ 360 member farms in the Northeast will vote on the merger later this month. In the meantime, several meetings will be held to address farmers’ questions and concerns.
Board members say the merger will aid in much-needed infrastructure investments and give farmers a stronger position as processors and distributors continue to consolidate. DFA has reportedly promised an $18 million investment in the co-op if the merger is approved. The president of the St. Albans board, Harold Howrigan Jr., said the deal has been in the works for two years.
But not all farmers are convinced that a merger is the solution struggling Northeast farmers need. Julie Wolcott, an organic dairy farmer in Fairfield, Vermont, has resisted joining large co-ops like DFA for decades. She’s been a member of St. Albans for nearly 25 years, and appreciates its hands-on approach with farmers and its connections to the local business community.
“I’m not sure that DFA will continue with the member services and programs that we benefit from now,” says Wolcott. While there may not be immediate changes to the co-op’s operations, “over time there will be,” she says. “I think [the co-op’s] role in the greater St. Albans community will be diminished.” Later this week, Wolcott will attend one of the several local meetings, where she hopes she’ll have the opportunity to question DFA leaders about the specifics of the planned merger.
“DFA is a national dairy cooperative that prides itself in the diversity of its farms,” said Brad Keating, senior vice president and chief operating officer of DFA’s Northeast Area. “Through our governance structure, family farms of all sizes have a voice at the local level and national level. Vermont dairy farmers have a long and rich history of producing high-quality milk and other dairy products, and we are committed to helping this continue.“
DFA, the largest dairy cooperative in the country, controls about 30 percent of the nation’s milk production and much more in certain regions. The cooperative has moved into other parts of the dairy supply chain, including owning its own processing plants and trucking and producing private-label brands. It claims 13,000 dairy farmers as members.
St. Albans already has a relationship with DFA, which it joined as a member cooperative in 2003. But the pending merger would make the smaller co-op a wholly owned subsidiary of DFA.
DFA has been the target of several lawsuits from its members, who have accused the cooperative of working to fix milk prices. It has also come under scrutiny for its supplier relationship with Dean Foods, a top dairy processor, which was investigated by the Department of Justice in 2004. The investigation was closed without explanation.
Ed Maltby, executive director of the Northeast Organic Dairy Producers Alliance, says he sees “nothing good” coming from the St. Albans/DFA merger. “It’s going to be difficult to prevent abuse, especially on the small and midsize operations,” he says, citing some farmers’ negative experiences with DFA.
Organic dairy farmers were once somewhat insulated from low milk prices, but today that premium is shrinking. Farmers in many regions report that organic co-ops aren’t accepting new members. And Maltby says that even organic co-ops are adding new fees and restricting which farms they’ll pick up from.
“The writing is definitely on the wall for both the conventional and the organic small to midsize dairies,” Maltby says. “I wish I could be more cheerful, but the dairy world these days, both organic and conventional, is not very happy.”
Some dairy farmers are pinning their hopes on a national supply management system for dairy, which would stabilize prices for farmers. In Vermont, a state commission recommended exploring such a program, but noted that national participation would be necessary for it to be successful. The commission included DFA.
Dairy farmers across the country have been struggling with the effects of long-term low prices, overproduction, and consolidation. Processors and marketers such as Dean Foods and Dairy Marketing Services, the marketing arm of DFA, have cut their contracts with hundreds of farmers. The Department of Agriculture reported in March that the country lost more than 2,500 dairy farms in the prior year, reducing the total number to 37,468. Dairy farms have continued to shutter across the country in 2019.