The balancing power of co-ops
Katelyn Allen, Associate Editor
May 24, 2021
Making sure that every farmer’s bulk tank is empty at the end of each day is key for the team that works at and with FarmFirst Dairy Cooperative, said General Manager Jeff Lyon on the May 19 Hoard’s Dairyman DairyLivestream.
“That’s what it’s all about,” Lyon said. “They’re milking the cows, and it’s our job to sell it and get the best price that we can for them. It’s a responsibility that we have.”
When co-ops take on the marketing roles for their members' milk, that means they are responsible for balancing their milk intake with demand. That’s not always a simple task either as orders change based on the time of year or even just customer demand that week. Lyon said that the schedule for each week’s orders is organized the preceding Thursday and the co-op is in contact with procurement leaders daily, but of course, orders may come in late, back out, or change.
“You think they’re going to get their normal order, but they may say they’ll be down for maintenance or [short staffed because] a holiday’s coming up,” he noted. “You have a real balancing act of trying to move that milk around because any week, it’ll be so-and-so needs more, somebody needs less.” He noted that during the height of the pandemic last spring, the co-op did not have to dump any milk.
FarmFirst is not a processing cooperative, so the milk from all 3,000 of their members across seven states goes to one of the co-op’s approximately 160 patrons, some of which only buy from them and others that buy supplementally. Their customers represent all four classes of dairy products, which can present a balancing challenge in itself, Lyon shared. The co-op also operates an intake facility where milk can be held if the supply needs to be balanced with orders coming in.
Occasionally, they will need to buy more milk to meet their orders, Lyon said. Other times, they’re able to sell excess milk to plants that buy from different organizations but have the need for more.
All of that maneuvering and development of relationships is how the co-op works to add value to their members’ milk — and even milk not from their members. “We provide a valuable service to our customers and our buyers in the fact that we’re the people they go to when they need milk. They’re not out chasing it,” Lyon said. “Some of our buyers are occasionally looking for organic milk or grass-fed milk or A2 milk, and they give us a call.” Even though none of their members supply grass-fed milk, the co-op will go out and find it so that processors with a demand for milk can ship it to their customers and reach consumers with nutritious dairy products.