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Agropur, Farmers Dairy to merge

The dairy farmer members of major dairy co-operatives in Quebec and Atlantic Canada are set to vote next month on their marriage proposal.

Agropur, the Quebec dairy co-operative whose products include the Natrel, Quebon, Allegro, Olympic and Island Farms brands, and Farmers Co-operative Dairy, which produces the Farmers and Central Dairies brands in Atlantic Canada, announced plans for their merger Monday.

General assemblies of the two co-ops’ members, for a vote on the proposal, are to be held separately on March 12. Pending approval from farmer members and "appropriate authorities," the co-ops’ "merger of activities" would take place April 2, they said.

"We believe that the new merged entity will be well equipped to ensure a sustainable dairy industry in the Atlantic provinces," said Farmers Dairy chair Jeannie van Dyk, a producer at Noel Shore, N.S.

"The merger of our two co-operatives is a first for Agropur in decades," Agropur chair Serge Riendeau, a producer from Coaticook, Que., said in the same release, referring to the consolidation of co-ops that formed Agropur over the past 75 years.

"The merger will allow us to better serve our customers on a national basis, and support the overall objective of consolidating the co-operative milk processing sector for the benefit of the member dairy farmers," Riendeau added.

Agropur is by far the larger of the two co-ops, with 3,288 dairy farmer members and a total processing handle of over 3.2 billion litres of milk per year through 25 plants in Canada and the U.S., for annual sales of about $3.6 billion.

The Longeuil, Que.-based co-op has been on an intermittent buying run in recent years in the U.S., where last month its Main Street Ingredients arm — which it bought in 2010 — took over Foremost Farms’ dry blending business.

In Canada, meanwhile, the co-op has contracted some operations, shutting its production plant in Sudbury, Ont. in 2010 and its Laiterie Lamothe in Drummondville, Que. in 2009. Last year, however, it expanded the operations of Ultima Foods, its joint venture with Edmonton’s Agrifoods International, to launch Iogo, a new yogurt and dairy product line.

Farmers Dairy, meanwhile, has 116 dairy farmer members in Atlantic Canada and books annual sales of about $176 million, processing the Farmers brand of milk and dairy goods through its plants at Bedford and Truro, N.S. and St. John’s, N.L.

Founded in 1921, Bedford-based Farmers Dairy became a farmer co-operative in 1961 and took over Central Dairies in 1981. Central Dairies, formed in Labrador in 1960, runs several facilities in Newfoundland and Labrador and distributes its own self-titled brand as well as Farmers products.

Details such as the proposed co-op’s name and the future of its brands weren’t discussed in Monday’s release. However, Farmers Dairy said in its merger announcement Monday on Facebook that "we plan to keep both of these strong brands (Farmers and Central Dairies) in Atlantic Canada."

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