Land O’Lakes, Maryland and Virginia Milk Producers Cooperative Association, Lone Star Milk Producers, and Arkansas Dairy Cooperative Association Move Toward Unification
Land O’Lakes, Inc., Maryland and Virginia Milk Producers Cooperative Association, Lone Star Milk Producers, Inc., and Arkansas Dairy Cooperative Association have signed letters of intent to develop a plan for merger, officials of the four cooperative organizations said today. A new Eastern Fluid Milk Marketing Division of Land O’Lakes would be created and would operate under the established Advantage Dairy Group identity.
Advantage Dairy Group was established in January 2000 as an East Coast milk-marketing joint venture involving Maryland and Virginia Milk Producers, Land O’Lakes, and Southeast Milk, Inc. (SMI). The South East Milk Marketing Agency — which includes Lone Star Milk Producers and Arkansas Dairy Cooperative Association — joined in June 2000. While SMI will not be part of the merger, it is anticipated that SMI will continue its mutually beneficial marketing relationship with the new Advantage Dairy Group.
“This consolidation will bring together four organizations that share a commitment to the dairy industry and dairy-producer success, as well as a dedication to quality and operational excellence,” Land O’Lakes President and Chief Executive Officer John E. Gherty said today. “In addition, it will continue the successful eastern milk-marketing efforts of Advantage Dairy Group. Ultimately, it will put us in a better position to compete effectively and deliver maximum value to members and customers.”
Maryland and Virginia Milk Producers Cooperative Association General Manager Robert Shore, who will manage the new Land O’Lakes Eastern Fluid Milk Marketing Division, said Advantage Dairy Group would address current industry forces on behalf of member-owners.
“We are operating in a rapidly consolidating industry, in which success is increasingly determined by the ability to maintain competitive size and scale,” Shore said. “This addresses that issue and continues the strong member and customer relationships that are part of Advantage Dairy Group. The new organization will enable us to improve milk-marketing efficiencies and market access for members.”
“Establishing and maintaining a national procurement, processing and marketing system are also critical to success in today’s dairy industry environment,” Gherty added. “The merger being explored will create a strengthened Eastern Fluid Milk Marketing Division within Land O’Lakes farmer-owned organization. Land O’Lakes has a well-established national presence in dairy foods manufacturing, milk marketing and value-added product marketing.”
Maryland and Virginia Milk Producers Cooperative Association President Jack Hardesty said that the four organizations were well-suited for unification.
“We have a proven record of working together,” Hardesty explained. “And, we share a cooperative commitment to generating and preserving market access for member milk, adding value to that milk and generating positive returns for producer-members.”
Lone Star Milk Producers General Manager Jim Baird said, “When you look at customer consolidation and federal order reform, we’re operating in an environment that makes this an important, positive, strategic decision.”
Officials of the four organizations did not release further details of the merger discussions, but indicated a target of early fall for the development of a definitive merger agreement. That agreement would be subject to approval by the members of each participating cooperative.
Land O’Lakes annually procures and processes approximately 12 billion pounds of milk, relatively equally divided among its eastern, upper midwest and California dairy-producer regions. Maryland and Virginia Milk Producers Cooperative Association, which markets milk for producer-members in ten eastern and southeastern states, handles over three billion pounds of milk annually. Lone Star Milk Producers markets 700 million pounds of milk in eight states from Kansas to Alabama. Arkansas Dairy Cooperative Association handles 300 million pounds of milk in four mid-southern states.
Land O’Lakes (http://www.landolakesinc.com) is a national, farmer-owned food and agricultural cooperative, with sales approaching $6 billion. Land O’Lakes does business in all fifty states and more than fifty countries. It is a leading marketer of a full line of dairy-based consumer, foodservice and food ingredient products across the U.S.; serves its international customers with a variety of food and animal feed ingredients; and provides farmers and local cooperatives with an extensive line of agricultural supplies (feed, seed, crop nutrients and crop protection products) and services.
Maryland and Virginia Milk Producers Cooperative Association (http://www.mdvamilk.com) is a milk marketing and processing cooperative which markets milk for nearly 1,600 dairy farmers in ten states from Pennsylvania to Alabama. Headquartered in Reston, Va., the cooperative includes a fluid milk processing plant in Newport News, Va.; two manufacturing plants in Laurel, Md. and Strasburg, Va.; and an equipment warehouse in Frederick, Md.
Lone Star Milk Producers, Windthorst, Texas, markets 700 million pounds of milk for 130 dairy farmers in Texas, Oklahoma, Kansas, Missouri, Arkansas, Louisiana, Mississippi and Alabama.
Arkansas Dairy Cooperative Association, Damascus, Ark., represents 300 million pounds of milk and 185 dairy farmers in Arkansas, Missouri, Kansas and Oklahoma.
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