Associated Milk Producers Inc. (AMPI) and First District Association (FDA) announced Feb. 24 the formation of a jointly owned common marketing agency (CMA) of the two Minnesota-based dairy cooperatives.
The CMA will optimize operational and supply chain efficiencies to benefit members and customers. This includes enhanced on-farm services, better using manufacturing capacity, and serving domestic and global customers with an expanded dairy product portfolio.
“We see endless opportunities to leverage our dairy farmer-owned assets,” says Josh Barka, chairman of the FDA board of directors. “The CMA exemplifies the cooperative principle of cooperation among cooperatives.”
“The CMA is a natural progression for two like-minded cooperatives to better position themselves for long-term strength,” says Steve Schlangen, chairman of the AMPI board of directors.
Joining other ag sectors in using a CMA
Michael Boland, a professor of agricultural economics at the University of Minnesota, said CMAs have been in use since before the Capper-Volstead Act was enacted in 1922.
“Co-ops in other sectors, such as dairy cattle genetics and sugar beets, have used CMAs to their advantage,” Boland says. “It allows cooperatives to coordinate value-added services with each other, while individual cooperative members retain ownership and independence.”
The CMA, known as the American Dairy Cooperative, will be led by a board of directors comprised of AMPI and FDA members. Together, the CMA members annually produce 7 billion pounds of milk.
AMPI is headquartered in New Ulm, Minn., and owned by dairy farm families from Wisconsin, Minnesota, Iowa, Nebraska, South Dakota and North Dakota; it markets cheese, butter and powdered dairy products to food service, retail and food ingredient customers.
FDA, based in Litchfield, Minn., has been in business since 1921. Its mission is to create a sustainable market for dairy products and allow family farms to prosper in the time-honored Midwest dairy tradition.