On Board With The Chairman - August 2024
Dear Member-Owners,
The Board held its regular meeting with heavy hearts this past Tuesday, as the celebration of life service for Hazel Moons was also happening that mid-morning. We moved the meeting agenda around to allow board members who wanted to attend the service to support the family. We continue to pray for Austin, Tyra, Jacobus, and the entire extended Moons/Wilgenburg families and pray that our Lord continues to comfort them as they navigate these roads ahead.
Jason Allen started his slide deck with the financials for the month of July. July was a tougher month for our Co-Op, but better than we had budgeted. The team has been diligent about keeping milk in the right plants at the right times and keeping the plants running as efficiently as possible when milk supplies are low due to heat stress on our herds. Jason gave us an update on our product inventory positions and where we would like to be at the end of the year.
Rob was up next and presented several items to the Board, including a review and update to CDI’s degrade policy. As you may be aware, CDI is the only milk handler in California that still maintains the ability to process degrade milk in order to return a better price to our member-owners than what a calf ranch would be willing and able to offer for that degrade milk. In reviewing the details of the program, management and the Board do not believe the current structure ensures that members who are producing degrade milk are carrying the cost of maintaining that program. Therefore, the Board approved an updated policy that will be effective October 1, 2024. More information will be shared in a separate member communication, but in short, degrade milk will be subject to a handling charge of $5 per cwt, plus any additional hauling costs needed. This updated policy will allow CDI to continue handling degrade milk produced by our member farms, at a predictable handling cost for the members, that is proportionate to the actual costs borne by CDI in handling that milk.
Next, Rob invited Dennis Bettencourt into the meeting to update the Board on plant operations and some ongoing projects. These projects include enhancements to CDI’s portfolio of products, including the production of Lactoferrin, enhanced production of Milk Protein Concentrates, and additional retail butter production. Dennis also reported on seasonal work being done by his team around preventative maintenance to get ahead of the winter months and increased milk volumes that will be coming to our plants.
Brad then presented some industry and global market updates, as the Board took a deep dive into product pricing trends. Brad also provided an update on additional projects at various due diligence and development levels. While several large-scale transformational investments are being executed – most notably Valley Natural Beverages (VNB) – these projects take a lot of time to move from concept to due diligence to approval to execution. Not every idea makes it through that process. So, it is critical that the organization continue to explore additional opportunities and “fill the pipeline” with projects that will improve returns to our members.
Peter Ernster then came into the board room and gave an update about VNB and the progress being made there. The plant’s construction is moving along at a great pace, and we thank Peter and Troy Hancock (VNB Site Director) for their leadership on this project to keep it moving to start on time and within budget. If you’d like to see updates, the team has been doing a good job documenting the progress on social media. Check them out on LinkedIn, Instagram, or Facebook, and follow them to receive the newest updates @valleynaturalbeverages.
As I close this update, I’d like to take a moment to express our heartfelt gratitude to Phil Girard, our outgoing Chief Financial Officer. This was Phil’s last board meeting with CDI, as he will be retiring from CDI at the end of September. Phill’s endless hard work and dedication to our Co-Op over his tenure here have been invaluable. He was a true asset to the team and will be greatly missed. On behalf of all the member-owners, we thank Phil for everything he’s done and the countless hours he’s put into the Co-Op. We wish him nothing but the best in his next endeavor, and may God bless him and his family as they start this next chapter.
All the best,
Cory Vanderham
559-269-9618
