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December 2, 2002

Agri-Mark Set To Purchase McCadam Cheese Business

Methuen, Mass. - Agri-Mark officials announced today that the dairy farmer cooperative has signed a letter of intent to purchase the McCadam Cheese business from Valio Limited of Finland. The purchase includes Valio's cheese manufacturing assets in Chateaugay, N.Y., which produce award-winning New York Cheddar, Muenster, Colby, and other cheeses, including European varieties. The purchase is contingent upon a merger between Agri-Mark and the roughly 150 members of the Chateaugay Cooperative, who are co-owners of the facility with Valio. Chateaugay Cooperative is headquartered in the town of Chateaugay adjacent to the plant, and its membership is located in Clinton, Franklin and St. Lawrence counties. The Chateaugay Board of Directors has voted to recommend merger with Agri-Mark in conjunction with the purchase of the McCadam business. Members of both cooperatives are scheduled to vote on the merger in January. Agri-Mark already markets milk for many dairy farmers in the area and expects a smooth transition. Financial terms of the deal were not disclosed, but officials say they hope to have a deal completed by late January. Agri-Mark is the premier dairy manufacturing and marketing cooperative in the Northeast, with 1,400 farmer-members from the six New England States and New York. The cooperative, with more than $625 million in sales in 2001, markets much of its milk nation-wide through its own Cabot brand of Vermont Cheddar cheese, butter and other dairy products. The rest of its milk supply is marketed to dairy processors in the eastern U.S. Agri-Mark owns three dairy processing plants - two in Vermont and one in Massachusetts. Other assets to be purchased by Agri-Mark are located in Heuvelton, N.Y. Activities currently performed at this location will be re-configured and consolidated with the Agri-Mark and Cabot operations. The purchase and merger may also be affected by other factors, including completion of due diligence and possible grants from the New York State Department of Economic Development. "I'm extremely pleased that McCadam Cheese will become part of our farmer-owned business," says Paul P. Johnston, Agri-Mark President and General Manager. "McCadam presently has more than $60 million in sales, and its strong and varied cheese business will be a great complement to our Cabot brand of dairy products. Agri-Mark strongly believes that one of the best ways for dairy farmers to receive more return for their milk is through investment and participation in the consumer dairy product market. This investment in McCadam is a continuation of our commitment to this principle." Lester Carter, President of the Chateaugay Cooperative, feels the merger will benefit both groups of dairy farmers. "I feel very strongly that the purchase of McCadam by Agri-Mark and the merger of the two cooperatives will greatly benefit our members and other producers in Upstate New York," he says. "Chateaugay Cooperative has owned the cheese manufacturing plant since 1949, and we are very pleased that not only is this plant going to continue to operate, but that the entire McCadam Cheese business is now owned by dairy farmers in the Northeast." Carter says the Chateaugay Cooperative's farm supply store adjacent to the plant will continue to be operated by the merged cooperative and service the farmers in the area. He notes that the purchase and merger are important for local dairy farmers and will also provide employment opportunities for people living in the nearby communities. Dairy farmer Carl Peterson of Delanson, N.Y., serves as Chairman of the Agri-Mark Board of Directors. He expects that the expertise Agri-Mark and Cabot have manufacturing cheeses and other dairy products will help propel the McCadam business to new levels of market growth and profitability for dairy farmers. "Nothing is stronger in the marketplace than farmers working together," Peterson says. "I look forward to working with the Chateaugay Cooperative to bring about a successful merger and work together with them to further expand the McCadam business." Valio Ltd. is also a dairy farmer-owned cooperative engaged in processing and marketing milk, dairy products and other food products totaling more than 1,300 items. Valio Ltd. Is owned by 31 Finnish cooperatives and 16,300 dairy farmers who produce milk for the company. Valio has 18 production plants in Finland, one in Estonia and one in Chateaugay, New York.

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