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2014 Ag Economic Outlook Conference Cornell University – Ithaca, NY

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1 2014 Ag Economic Outlook Conference Cornell University – Ithaca, NY
Craigs Station Ventures Farm Partner in WNY Enterprise LLC d/b/a Craigs Station Creamery 2014 Ag Economic Outlook Conference Cornell University – Ithaca, NY

2 Craigs Station Ventures
Family owned and operated dairy farms located in the western New York milkshed Producing high quality raw milk products More than 13,000 cows housed on dairies located within 25 miles of the plant Producing approximately 110,000 gallons of milk/day for delivery to local processors

3 Craigs Station Ventures
1) Noblehurst Farms, York 2) Lawnel Farms, York 3) Mulligan Farm, Avon 4) Coyne Farms, Avon 5) Synergy, Wyoming 6) Southview Farm, Castile 7) Baker Brook Dairy, Attica 8) McCormick’s Dairy, Bliss

4 Craigs Station Ventures
Noblehurst Farms, York Lawnel Farms, York 1,650 cows 1,500 cows; two sites Mulligan Farm, Avon Coyne Farms, Avon 1,200 cows 1,000 cows

5 Craigs Station Ventures
Synergy, Wyoming Southview Farm, Castile 2,100 cows 2,000 cows, two sites Baker Brook Dairy, Attica McCormick’s Dairy, Bliss 1,600 cows 2,300 cows

6 Craigs Station Ventures
Craigs Station was a stop on the DL&W (Delaware, Lackawanna and Western) railroad. It was located about a mile to the east of the plant site. Dairy farmers used to bring milk and cream in 10 gallon cans to stations like this one for collection. The train would transport those cans to a creamery for bottling and shipment to New York City, Boston, and other Northeast cities.

7 WNYE/CSC Joint Venture
Dairy Farmers of America (DFA) and Craigs Station Ventures (CSV) formed JV in mid-2013 DFA is nation’s largest dairy cooperative CSV comprised of eight cow dairy farms located in the heart of western NY milkshed Broke ground in mid-September 2013 on cold milk separation facility Commissioned early October 2014 Operational on October 17, 2014

8 View from Above

9 Expanded View from Above

10 First load saleable milk – 10/17/14

11 First load saleable milk – 10/17/14

12 More pictures from the first day

13 More pictures from the first day

14 More pictures from the first day

15 Products It all starts with consistent, high quality farm milk
Grade A rBST-free Skim milk / Standardized milk 40% butterfat heat-treated cream Cold bowl separated Reduced protein denaturing (standardized/skim) Enhanced cream functionality Kosher certified Product fortification available (i.e. Vitamin D)

16 Attributes Locally produced New York milk
All eight farms located within 25 miles of WNYE/CSC Traceability back to these farms DFA Gold-standard-plus production WNYE powered by on-farm green energy Reduced carbon footprint Low hauling miles, green energy, modern/efficient milk production and processing

17 Sustainability Members committed to sustainable, efficient farming practices One of the CSV member farms has largest on-farm digester in New York state Noblehurst operates anaerobic digester next to milk plant that: Recycles facility’s waste effluent Provides green energy to facility Reduces plant’s carbon footprint Synergy Biogas 1.4 MW Bigadan A/S owned and operated on-farm co-digestion plant Also processes local dairy plant effluent (whey) Future expansion to 2.0 MW Noblehurst Green Energy 440 kw on-farm co-digestion plant Arranged to accommodate 2nd digester and doubling of energy output

18 Operational Efficiencies
Tanker washing capability at WNYE/CSC Milk scheduling advantages 100% loads at 60,000+ lbs milk per load Quality checked loads before shipment Reduced shrinkage at buyer’s plant

19 Relationship Farm-direct relationship with the added protection of a $12 billion dairy cooperative Periodic meetings with WNYE/CSC plant management and CSV farmer representatives Relationship with DFA, America’s leading dairy cooperative Key New York state regulatory relationships Global business connections Price risk management opportunities Improved price predictability Reduced price volatility Better performance to budgets

20 33 DFA Affiliated Plants Nationwide
Ingredients–Cheese Ingredients–Protein Contract Manufacturing Consumer Brands Fluid Milk and Ice Cream Turlock, Calif. Beaver, Utah West Middlesex, Pa. New Wilmington, Pa. Hughson, Calif. Fort Morgan, Colo. Schulenburg, Texas Springfield, Mo. Cabool, Mo. Mechanicsburg, Pa. Ventura, Calif. Winnsboro, Texas Goshen, Ind. Reading, Pa. St. Albans, Vt.* Houston, Texas Cedarburg, Wis. Zumbrota, Minn. Fargo, N.D. Farmington, Minn. Winthrop, Minn. Minneapolis, Minn. Portales, N.M. Fallon, Nev. New Britain, Conn. Rochester, Minn. Frederick, Md. Cass City, Mich. Adrian, Mich. Middlebury Center, Pa. Linwood, N.Y. Plymouth, Wis. Portland, Maine * The plant in St. Albans, Vt., is a St. Alban's Cooperative Creamery plant. St. Albans is a member cooperative of DFA.

21 WNYE/CSC Joint Venture
Why? (cooperative perspective) Increasing demand for high quality milk components in the Northeastern U.S. dairy market Consumers/retailers calling for more traceability and sustainability from their suppliers In dairy, much of this falls back to the farm level DFA customers focusing more on marketing and product development and less on manufacturing This JV offers those customers a supply chain partner

22 WNYE/CSC Joint Venture
Why? (farmer perspective) Expand local dairy marketing opportunities Diversify direct investments beyond the farm Provide a different opportunity to work with like-minded producers Reduce the cost of hauling farm milk to market Connect food, cows, milk, farmers and family farms with consumers’ families

23 Industry Response So was this!
We understand that some say this project is: Non-traditional, out-of-the-box, or even risky Others will say this is: Disruptive to orderly milk marketing So was this!

24 Next Steps Northeast Dairy Market Development
Catalyze add’l dairy processing investments (particularly small to medium sized operations) using the milk supplies from this facility Harnessing value for milk/plant attributes Additional investment Niche opportunities within existing footprint Phase II expansion

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