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Agri-Mark posts six-year profit of more than $10 million


April 18, 2013

By G. Michael Dobbs

news@thereminder.com

SPRINGFIELD — The farmers who make up the Agri-Mark cooperative gathered in Springfield on April 11 for their annual convention and to assess the condition of the dairy industry in New England.

The co-operative has more than 1,250 dairy farm families in the six New England states and eastern New York, Doug DiMento, director of Corporate Communications told Reminder Publications. The milk produced by the farms is made into Cabot and McCadam cheese products as well as sold to H.P. Hood and Friendly's.

The co-op runs a processing facility on Riverdale Street in West Springfield that primarily produces butter and whey powder, he added. The whey powder is used by a variety of food producers to add extra protein into food products, DiMento explained.

The 400 people who attended the annual meeting in Springfield were primarily farmers, although there were others who work in the dairy industry, DiMento said. The farmers discussed future policies for the co-op and were advised on national and state legislative trends.

While the member families recently split a $10.2 million profit — the sixth year the profit has exceeded $10 million — it is less than last year, DiMento explained. The profit shares are important to farmers who are struggling to make ends meet.

Many factors go into the profitability of milk products and the future of the dairy industry, not the least of which is the number of farmers. DiMento said there were more than 850 family dairy farmers in Massachusetts in 1985. Today there are between 150 and 160.

Although milk prices are "OK," he noted what has hurt the farmers are "the Three Fs:" feed, fuel and fertilizer.

Feed constitutes 35 percent of the production costs, DiMento explained and the raising cost of fuel affects both the cost of everything.

"The high cost of production really is hurting farmers," he said.

The co-op also lobbies with the federal government as well as state governments on legislation that benefits farmers, DiMento added.

Massachusetts's farmers must also contend with the highest electric rates in the country and some of the highest real estate values in the nation, DiMento said. There is a real temptation for aging farmers who are retiring to sell their valuable farmland for redevelopment rather than attempt to find someone to carry on the traditional use.

That is why a program within the co-op to not only encourages young people to take up dairy farming, but also help train them, DiMento said.

"It's been really important for us to train the next leaders of the coop," DiMento added.

He said that farm real estate in upper New York is less expensive and that farmers in Connecticut, for instance, have sold their farms in that state to acquire property in New York to continue farming.

Milk, DiMento said, is a "seven-day a week product." He said that customers such as Hood and Friendly's only accept milk shipments three to four days a week, so that is why the West Springfield facility is important. It can process milk into "value added" products, such as butter.

Cheese is a valuable commodity for the co-op and the Cabot products are the top-selling products for the organization. DiMento explained the Cabot co-op joined Agri-Mark — founded in 1913 — in 1992.

What has helped the co-op is the growth of the Cabot products into new markets across the country. DiMento noted that each new WalMart Super Center carries Cabot cheese.

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