Dairy cooperative merger unites large, innovative farms

By Agri-Pulse staff

© Copyright Agri-Pulse Communications, Inc.



WASHINGTON, Sept. 10, 2014 - Two dairy cooperatives comprised of some of the nation's largest dairy farms in the Midwest and Southwest have merged, creating what could become the fifth-largest U.S. milk producer co-op with many of the industry's most innovative products and processing technologies.

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Select Milk Producers, based in New Mexico, and Continental Dairy Products, an Ohio co-op, announced the merger effective Sept. 1, with the new entity retaining the name Select Milk Producers with headquarters in Artesia, New Mexico. The two have shared common management.

Prior to the merger, Select consisted of 61 dairy farms in Texas and New Mexico that together milk some 136,000 cows and produce about 4.3 billion pounds of milk annually. Its market is primarily cheese and fluid milk plants in the region. Continental's members before the merger were 36 large farms in Ohio, Indiana and Michigan with approximately 76,000 cows that yield about 2 billion pounds of milk a year. Member farms' cows produce an average 29,716 pounds of milk each in a year, compared with a national average of less than 22,000 pounds.

In terms of milk marketed annually, Select's 6.3 million pounds of milk would rank behind Dairy Farmers of America, Kansas City, Mo.; California Dairies, Visalia, Calif.; Land O'Lakes, St. Paul, Minn., and Northwest Dairy Association, Seattle.

Select, created in 1994, was a pioneer in ultra-filtration or reverse osmosis facilities that remove water from milk to reduce transportation costs. It is in a joint venture with DFA and Ireland's Glanbia in New Mexico's Southwest Cheese, believed to be the largest cheese manufacturing plant in the U.S. It also produces a sports recovery drink marketed nationally by Coca-Cola.

Select has patented filtration technology that separates fat from protein from sugars from calcium and other solids from water in milk and recombines them in different ratios to provide a different profile of milk, its president, Brad Bouma, told a House Agriculture Committee hearing in 2009. “The double sugar, lactose, is converted to two simple sugars, glucose and galactose. These sugars are sweeter than lactose and thus the carbohydrates in the drinks can be reduced while maintaining the same sweetness of milk,” he said.

Select CEO Mike McCloskey, who also is third vice president of the National Milk Producers Federation, said that the merger “facilitates milk marketing strategies, eliminates market confusion with regard to identity by presenting one ‘face' to the market, and expands geographic coverage and influence for the combined entity.” The merger also “expands future borrowing capacities, decreases financing costs, provides access to capital markets and creates increased potential for expanding the customer base of the combined operations.”

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