DFA Under Federal Scrutiny
The Commodity Futures Trading Commission is investigating charges that Dairy Farmers of America used its trading of cheese contracts to drive up the price of raw milk.
According to published reports, the agency is preparing charges against Kansas City, Mo.-based DFA, the nation’s largest milk producer, for allegedly orchestrating an effort to boost prices through cheese trading at the Chicago Mercantile Exchange in 2004. DFA officials have denied the accusation and are said to be cooperating with federal investigators.
Meanwhile, the co-op revealed in early May that retired DFA chief Gary Hanman in 2001 transferred $1 million through a DFA affiliate to then-board chairman Herman Brubaker. Rick Smith, current president and CEO, reports the money has been recovered, plus interest, from Brubaker and Hanman, who spearheaded the creation of DFA in 1998 through the merger of four producer co-ops.
A committee has been formed to investigate the matter, and DFA has not ruled out pursuing criminal charges against Hanman and Brubaker, according to published reports. DFA offered no reason for the payment, which the co-op described as an “unauthorized transfer of money.”
Brigham’s May Be on the Block
Brigham’s Inc., Arlington, Mass., has appointed a new CEO amid published reports that the 94-year-old ice cream company may be sold. New executive Robert Wexler is “committed to maintaining the brand,” according to a company release. “There will be no disruption in operations as Wexler explores alternatives for the company.”
The Boston Globe reports that Brigham’s has hired an investment banking service to explore a possible sale or merger of the company. Brigham’s cited tough competition and the rising costs of ice cream ingredients as among the reasons for its decision, along with rising fuel and utility bills.
Brigham’s sales reached $20.2 million in the fiscal year ended April 1; its restaurants generated about $6 million of the total. Many of Brigham’s flavors draw on regional inspiration. The Big Dig’s ingredients include vanilla ice cream, brownie pieces, caramel swirls, and chunks of chocolate. Another flavor, Dice-Kream, salutes Red Sox pitcher Daisuke Matsuzaka.
Dean Foods Building Idaho Methane Digester
In partnership with one of its Idaho milk suppliers, Dean Foods Co. is developing an anaerobic digester near Gooding, Idaho. The Big Sky Dairy will capture animal waste from the farm’s approximately 4,700 dairy cows and process it through the digester.
The project, which is expected to be operational by early 2009, will be owned and operated by a partnership between Dean Foods and AgPower Partners. AgPower Partners consists of an affiliate of Andgar Corporation, an affiliate of GHD and Cenergy USA.
“Managing greenhouse gas emissions and animal waste is one of the dairy industry’s biggest challenges,” said Gregg Engles, Chairman and CEO of Dean Foods. “We are proud to have partnered with AgPower Partners to bring this important and sustainable dairy industry solution to the market. And we are very pleased that Big Sky Dairy has agreed to be our partnership’s initial project.”
The Big Sky Dairy digester project is expected to have generation capacity of more than one megawatt per hour of renewable “green” power, which will be sold into the local power grid. Separately, Dean Foods has become a Founding Reporter of The Climate Registry. The Climate Registry is a non-profit organization established to measure and publicly report greenhouse gas emissions (GHG) in a common, accurate and transparent manner consistent across industry sectors and borders. Thirty-nine U.S. states, six Canadian provinces, three Native American tribes, two Mexican states and the District of Columbia are the founders of the organization.
DFA, Brigham's, Dean Foods
June 1, 2008