Organic Valley Lost $10 Million in 2017 Despite $1.1 Billion in Sales

Excess milk supplies put pressure on dairy pricing leading Organic Valley to post an after tax loss of approximately $10 million in 2017.

During Organic Valley’s annual meeting on April 5 the cooperative shared that it suffered its first financial loss in 20 years. Organic Valley did see an increase of more than 4% in sales, for a gross sales total of $1.1 billion. This is the second year in a row the cooperative exceeded $1 billion in sales.

Organic Valley officials attribute the losses to both an excess supply of organic and conventional milk on the marketplace. Pricing have suffered, sales growth wasn’t has high as projected and the cooperative had increased inventory of non-fat dry powdered milk on hand.

Despite the losses for 2017, Organic Valley is optimistic about the future.

“Organic Valley has flourished over the past three decades and exceeded our founders’ expectations in nearly every way,” says Organic Valley CEO George Siemon. “Bumps in the journey, market fluctuations—they are inevitable. But our priorities are, and always have been, our farmer-members, our employees, our animals and our consumers. We’re confident that as we continue to work together as a cooperative, we are a force for good in a troubled time.”

For 2017, cooperative members were paid a national average of $32.85/cwt. of milk. The pay price for Organic Valley’s milk is approximately double what is being paid for conventional milk.

Organic Valley made improvements to its business by updating a new creamery in McMinnville, Oregon and opening a new cheese plant in Cashton, Wisconsin.

“We’ll continue to pull together and ask everyone to do their part,” says Arnie Trussoni, president of the cooperative’s board of directors. “We turned the numbers right side up in November and December, and plans are on the table to maximize organic milk utilization. We are a family and we don’t leave one another behind. That’s what our cooperative is all about.”

Organic Valley currently has 2,043 farms as members of the cooperative accounting for 14.4% of all U.S. certified organic farms and more than 493,000 organic acres. The cooperative was founded in 1988 and has members in 35 states, as well as Canada, Australia and the United Kingdom.