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California Dairies, Inc. to Acquire Security Milk Producers Association Assets and Members

November 8, 2012
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Acquisition will bring 33 additional dairies into state’s largest milk processing cooperative.

Source: CDI news release

California Dairies, Inc. (CDI), the largest dairy processing cooperative in California, has acquired certain assets of Security Milk Producers Association (SMPA), a California milk marketing cooperative, and will add SMPA members to the CDI membership effective Jan. 1, 2013.

The SMPA and CDI boards of directors determined that the member-owners of both cooperatives would be better served by promoting efficiencies gained by combining their memberships. With this in mind, the SMPA membership voted to dissolve its current management contract and to submit applications for membership in CDI. The CDI board of directors, at its Oct. 30, 2012 board meeting, approved the membership requests from all of the SMPA members who applied. In total, CDI will add 33 dairies owned by 25 SMPA members.

“On behalf of the CDI board of directors and management, I would like to warmly welcome the members of SMPA to the CDI family,” said Andrei Mikhalevsky, CDI president and CEO. “The addition of SMPA members to the CDI membership fits well with CDI’s growth strategy. Increasing milk supplies will strengthen CDI’s market position to the benefit of its member-owners, both old and new, through a continued positive return on investment.”

“For the last several years the SMPA board of directors had been looking to better balance its milk supply to its fluid sales with the goal of increased returns to its member-owners,” said SMPA chairman of the board, Ed Haringa. “As options were explored it became clear that aligning SMPA’s successful fluid milk sales business with CDI’s extensive processing capacity provided an opportunity for SMPA and CDI to better balance milk supplies in the state. CDI has a reputation for efficiently running large processing plants, and being a California-based cooperative run by like-minded dairymen, it made sense for SMPA’s members to join CDI. The SMPA board of directors is confident that its original goal of returning increased profits to its member-owners will be accomplished through this transaction.”

California Dairies, Inc. is the largest member-owned milk marketing and processing cooperative in California producing 43 percent of California’s milk. Co-owned by more than 420 dairy producers who ship more than 17 billion pounds of Real California Milk annually, California Dairies Inc. is a manufacturer of quality butter, fluid milk products and milk powders. In addition, California Dairies Inc. is the home of two leading and well-respected brands of butter – Challenge and Danish Creamery. California Dairies’ quality dairy products are available in all 50 United States and in more than 50 foreign countries.

Formed in 1974, Security Milk Producers Association is the fourth largest dairy cooperative in the state of California with 27 members who own 37 dairies. SMPA has specialized in servicing Class 1 milk contracts and supplying cheese processing plants with fluid milk for 38 years. SMPA is known for its exceptional customer service and quality superior milk.

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