Vermont Lawmakers Hold Hearing On Proposed Dairy Merger

Jul 17, 2019

The Vermont Senate Agriculture Committee heard testimony earlier this week on a proposed merger of the St. Albans Cooperative and Dairy Farmers of America.

The St. Albans Cooperative is one of the oldest in the state. It’s considering merging its assets, which include a milk hauling company and a creamery plant, with Kansas-based Dairy Farmers of America or DFA.

In late June the coop’s board recommended the merger, and its nearly 330 member farmers from Vermont, New Hampshire and New York will vote on the plan later this month.  

While the state of Vermont cannot play a role in the proceedings, Senate Agriculture Committee Vice Chair Chris Pearson said they held a hearing on the proposed merger this week because it is, as he puts it, a big deal.  “St. Albans Coop is the last coop in the state. Dairy is a big part of our economy and we wanted to understand the details and highlight the pretty significant issue that is being decided in Franklin County right now.”

Pearson says he was curious about the process and the merger’s potential impact on the dairy industry.  “It’s not clear exactly how much of farmers’ equity would be transferred to DFA and what that exactly means so we were poking around to understand the process, but also wanted the chance to ask some questions of DFA. They are a huge conglomerate so we wanted to make sure we at least understood that folks at St. Albans had kind of their eyes wide open.  There are several lawsuits pending against DFA where farmer members have suggested that they were not working to the benefit of their farmer members.”

DFA officials were not available for comment in time for broadcast. The Milkweed is a Wisconsin-based monthly dairy marketing report.  Editor Pete Hardin testified at Monday’s hearing.  He notes that the net worth of the coop’s assets will not be assessed until after members vote and there are reports that farmers face a potential doubling of equity payments. Hardin believes a full accounting of DFA’s finances should occur.  “I’m calling for a forensic audit of DFA by the state officials so that the members of St. Albans know what they’re getting into. I suspect the St. Albans members feel they don’t have many choices.  The milk powder processing plant is antiquated. And running a fleet of milk trucks in northern New England is not an easy task either!  So they need an infusion of capital. At the hearing one of DFA’s representatives stated that DFA had talked about investing 30 million in the plant and 5 million in the McDermott’s transportation subsidiary that St. Albans has. You know we’ll see if those promises come through.”

Again Senator Chris Pearson: “What I came away wondering was is this the smart choice or is this sort of the only choice given the economics of dairy right now?”