Organic Valley, a nationwide cooperative of organic farmers founded a little more than 30 years ago in Wisconsin, posted its second loss in two consecutive years, though sales grew 1% to surpass $1.1 billion for the third consecutive year.
The company had too much nonfat dry milk powder in its inventory, which it sold on the conventional market at a $37 million loss.
Despite a $12.6 million loss in net profit before tax, Organic Valley interim CEO Bob Kirchoff said Thursday at the annual meeting in La Crosse said he was optimistic and that the co-op balance sheet still looked “fantastic.”
Kirchoff was the chief business officer at Organic Valley before long-time CEO George Siemon stepped down in March.
The company reduced its debt by $40 million, improved its cash flows, invested in businesses and held “a stable pay price in a pretty tough market,” Kirchoff said. “We iterate that our business is very healthy and actually financially improved in a lot of ways.”
Organic Valley paid coop members a national dairy price of $29.74 per 100 pounds of milk in 2018, about $14 more than conventional milk prices. The year before, the co-op paid $32.85 per 100 pounds of organic milk.
The cooperative has also been investing in additional product branding and promotion.
Organic Valley began its first national media campaign in the fourth quarter of 2018, spending $5 million more in brand marketing and sales than it did in 2017, according to its 2018 annual report. And the company has been promoting grass-fed products and working with Maple Hill Creamery in New York to create a third-party certification system for grass-fed organic products.
“Innovation has to take place,” Kirchoff said, teasing that the company had two big announcements planned for later this year.