While many Mexican companies were suffering over the past year, the country's largest dairy company, Grupo Lala, took the opportunity of falling asset prices to go on a buying spree north of the border. The Coahuila-based dairy splashed out on three US dairy companies, Promised Land Dairy, Farmland Dairies and National Dairy. The most significant purchase, Dallas-based National Dairy, was bought for a reported US$435mn from its former parent company, co-operative Dairy Farmers of America. National Dairy gives Lala control of 18 dairy-processing facilities in the US as well as number of well known regional brands. The acquisitions followed the purchase of Nebraska-based Wells Dairy in 2008. The acquisitions make Lala the second largest dairy company in the US and the fifth biggest in the world. BMI believe the purchases will prove to be astute moves. Buying at a time when dairy prices were crashing and dairies across the country were losing money, the purchases came cheap relative to what they would have cost a year or more earlier. BMI believe Lala will now be in an excellent position to benefit from the expected continuing recovery in the world dairy market in coming years.
Thursday, May 6, 2010
La La
http://www.earthtimes.org/articles/show/research-and-markets-mexico-agribusiness-report-q2-2010,1286689.shtml
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John,
ReplyDeleteIt is vastly apparent that when our industry became consolidated and our largest Co-Ops shifted from marketing milk to just handling milk, the farmer became the loser. Recently I was in Lebanon, PA and Swift Premium has been paying their producers substantially more than rival Land-O Lakes. I was told about $3 more per hundred. It would appear that Swift is a milk marketer. They promote their product, have a plant and market for optimum price passing that on to producers. What a great idea! How innovative! If you look at Up State Milk Co-Op they too have a plant and they market their milk for optimum price. There producers receive an extra check for plant profit! Wow, how innovative.
Then we have milk handlers. They are massive and at the end of the day, if they have too much milk they sell it at a loss and blend the price for their producers or if they are short and need milk they pay a premium to obtain it and that costs their producers. It is ironic that the price paid to Northeast producers is actually less than many states west of us. Here we are, the largest class I market in the country and our producers are paid less.
Time for heads to roll. Time for a change. LaLa stands to make a fortune and once again the producers are short changed.
This is not that hard to figure out!
Dave Rama
Isn't it nice that American dairy farmers were able to help finance this conglomerate? Now they can join the ranks of DFA, Dean, Dairy America, LOL, and the rest of the dairy industry and continue the screwing of the American Farmer. RIP
ReplyDeleteDido Dave. Couldn't of said it better myself
ReplyDeleteSwiss premium is Dean Foods, don't be fooled by the name. Even Swiss Premium producers don't receive enough to pay the bills.
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