Darigold eyes export opportunities as it forges GDT partnership

The Seattle-based farmer-owned co-op has made a string of capital investments in recent years – most recently in a new production facility, due to open in Pasco, Central Washington – but its ambitions span beyond the US market. Being one of the largest dairy producers in the US, Darigold announced it has joined the Global Dairy Trade (GDT) platform to better support its growth ambitions and create value for its farmer owners.

The co-op also completed its first product offering through GDT Events in the shape of two skim milk powder products and one buttermilk powder product, but this wasn’t the co-op’s first experience in overseas trade. Contacted for comment, Darigold’s Chris Arnold declined to discuss the plans in detail for competitive reasons, but added that the co-op sees an opportunity for growth in new and existing markets. “In our last fiscal year [ended 31 March 2023], we sold products – powders, butter, cheese, and fluid milk – into about 30 countries worldwide. We believe there is an opportunity to grow our business in many of those markets, as well as to expand into new markets.

“While demand for the portfolio of products we export ebbs and flows, we continue to think there are opportunities in each of these areas.”

The co-op will also increase its production capacity of products such as powders and proteins once its latest production plant located in Pasco, Central Washington, becomes operational. “Our new facility in Pasco is our third capital investment in as many years aimed at increasing capacity and producing higher value products, and is an important part in a multi-year transformation aimed at modernizing and globalizing our co-op,” Arnold explained. “This facility will produce butter and premium proteins, including tier-one powders that allow our co-op to provide an in-demand, value-added product that is unique among US domestic producers.”

Under its own brand and through a number of private label partnerships, Darigold produces and sells a variety of dairy products – including fluid milk, butter, cheese, sour cream, and cottage cheese – throughout the Northwest, where its 300 member farms and 11 production facilities operate. Globally, the co-op exports butter, cheese, and powdered products.

Asked if the co-op will focus on powder export going forward – particularly considering the first offerings through GDT Events were powders -  Arnold insisted it was too early to ‘offer really meaningful insights into what the opportunities ahead may be’. “We joined GDT because we believe the platform may be a useful tool to help connect us with new customers, access new markets or expand in existing markets, and to introduce Darigold to customers who may not be familiar with our co-op,” he explained.

But while the global dairy commodity markets have calmed in recent months, jitters are still being felt. “Market volatility continues to be real, both domestically and globally, and that volatility continues to be challenging,” admitted Arnold.

“Ultimately, however, we believe there’s value in foreign markets. As a co-op, our role is to create and sustain markets for milk coming from our farmer-owners’ farms. With global demand for dairy growing more rapidly than demand in the US market, and excess capacity in the US dairy sector, we continue to think that global opportunities play an important role in growing our business and creating value for our farmer-owners.”

Arnold also highlighted that the co-op has an edge when it comes to geographical location and access to logistics infrastructure. “We believe that our competitive advantage comes from the combination of two things,” he added. “First, we are in a part of the country – the Northwestern US in the states of Washington, Oregon, Idaho and Montana – that is ideally suited for producing dairy.

“What’s more, that location gives us great proximity to global shipping infrastructure, including maritime ports, airports, railways, and interstate highways, which provides us with a transportation efficiency that other dairy producing regions might not have. We are looking to leverage those attributes – along with sales offices we have established in other key, strategic markets – to help us grow our business globally.”

Reflecting on the partnership with the Seattle-based co-operative, Eric Hansen, CEO of Global Diary Trade, said: “Our three-year strategic plan includes a focus on improving the global supply of dairy products. In line with this, we are actively looking to attract new sellers from all global milk pools to offer our bidders more choice and enable GDT to publish credible reference prices for more products and across more regions. US exporters play a significant role in our model, and we are thrilled to have a top-tier producer like Darigold join GDT.”