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The First District Association - 100-year old Dairy Co-op Embarks on Major Expansion - CoBank Site
100-year-old Dairy Co-op Embarks on Major Expansion
Minnesota-based First District Association is a century-old dairy cooperative and ingredient supplier, using milk from its 650 farmer-members to produce an array of cheese, powder and liquid dairy products for domestic and global customers.
Traditionally, the co-op has been financially conservative, paying off debt as quickly as possible. But in 2019, FDA stepped outside of its comfort zone, embarking on the largest expansion in its history and investing in new processing facilities that increased its capacity to a staggering 7.5 million pounds of milk per day.
We are extremely proud of this expansion project. Thanks to the financial assistance of CoBank and the Farm Credit System, we were able to hit $1 billion in revenue last year.
FDA is a grassroots organization. Its members have been very involved and open-minded throughout its history, recognizing change is necessary—reinvesting back into the co-op is imperative to stay modern and also relevant in the industry.
“Making this type of investment and pursuing such a large expansion was not a decision FDA made lightly. We are family-farmer driven. Our members are who we are to our core. And that’s why we took the plunge—our board and management had an eye to the future—it was for our members,” said Bob Huffman, FDA’s president and CEO. “As we look forward, we are excited for the opportunities ahead, ensuring our next generations of dairy farmers will grow alongside us for the next century.”
The association required $180 million in new financing for the expansion project, and CoBank, along with seven other Farm Credit Associations, stepped in to facilitate its needs.
“We have been a CoBank customer for decades, but a lot of those years we were also debt-free,” said Glenn Kaping, senior vice president and CFO. “As we took this big step, we really valued CoBank’s knowledge—as a cooperative bank, they truly understand our perspective, and you also can’t beat their level of engagement. The bank’s executive management traveled to our new facility not once, but twice since its completion. That is so meaningful to FDA and our members.”
Despite the global pandemic causing supply chain issues, construction remained on schedule, and by 2021, FDA opened three new facilities—including a cheese plant and cooler, an 11,000+ square foot expansion onto its lactose plant and a new milk receiving facility. These new additions will now allow FDA to process 2 million more pounds of its customer-owners’ milk per day—boosting its capacity from 5 million to 7.5 million.
“We are extremely proud of this expansion project. Thanks to the financial assistance of CoBank and the Farm Credit System, we were able to hit $1 billion in revenue last year, which puts us in the position to be strong and sound for our membership now and well into the future,” Huffman said.
