Dairy Co-ops Explore Joint Venture

November 29, 1999

Dairy Farmers of America (DFA) of Kansas City, MO, and Canada's Dairyworld Foods are exploring a joint venture in marketing specialty dairy ingredients. The longer range intent is to form a more permanent joint venture company.

Dairyworld Foods is a Canadian dairy-processing cooperative in Vancouver, British Columbia, representing 1,750 dairy farmers. The cooperative processes fluid milk and manufactures cheese and other dairy products. DFA represents 25,000 dairy farm family members in 45 states, manufactures and markets a complete line of dairy products and supplies milk to fluid milk processors nationwide.

The proposed transaction involves the joint marketing of selected products of DFA's limited liability company, Main Street Ingredients, LaCrosse, WI, and Dairyworld's joint venture partner, Pascobel Inc., Longueuil, Quebec. Pascobel and MSI intend to use the marketing structures and technologies of both companies to produce and market selected ingredients.

"This agreement...is the first step toward a longer germ joint venture relationship," says David Coe, president and CEO, Dairyworld. "It provides the opportunity for both organizations to combine strengths and bring a wider range of complementary specialty dairy products to U.S. and Canadian markets where demand is building rapidly for those types of dairy ingredients."

Gary Hanman, DFA president and CEO, calls the agreement "a great step towards developing a long-term relationship that can benefit dairy farmers and their customers on both sides of the border."