Posted on 10/10/2009 4:50:08 PM PDT by Graybeard58
MONTPELIER, Vt. — A group of dairy farmers is suing four milk marketing firms, saying they've engaged in monopolizing the market into which farmers have had to sell milk, fixed prices and created an economic crisis in the Northeast dairy industry.
The Washington-based law firm Cohen Milstein says it expects many farmers will join a class action suit against Kansas City-based Dairy Farmers of America and Dallas-based Dean Foods Co.
The suit alleges DFA and Dean have seized effective control of the region's dairy industry and are forcing farmers to join DFA or its marketing affiliate Dairy Marketing Services to survive. DMS and HP Hood also were named as defendants.
Hood spokeswoman Lynne Bohan said the company had not seen the lawsuit and could not comment. DFA issued a statement calling the allegations "without basis."
"We are continuously looking for additional ways to increase dairy farmer pay price and net returns, not suppress them, and have been successful in doing so," DFA said.
A message left at Dean Foods was not immediately returned.
Benjamin Brown, a lawyer for Cohen Milstein, said the suit had been filed as a class action, meaning that those who could collect from a jury verdict could include not just the two dairy farm families named as plaintiffs, but thousands more "similarly situated."
Brown said he did not know how many dairy farmers would be affected. DFA's Web site says it has 1,563 member farmers in the Northeast.
Brown said DFA, the nation's largest dairy cooperative, and Dean, the largest processor in the United States, had worked together to lower prices paid to farmers for their milk "by making DFA and its affiliates the exclusive suppliers of milk to Dean and HP Hood."
Dean and Hood bottle about 90 percent of the fluid milk sold in the Northeast, Brown said.
"Monopolization and price-fixing have contributed to the milk-pricing crisis dairy farmers, especially small, family-owned dairies in the Northeast, face today," Brown said.
"Many dairy farmers have been forced to choose between joining DFA or DMS or going out of business," Brown said. "If they join, they have to pay a fee to continue to market to their own customers at prices fixed by DFA, DMS and other cooperatives. Meanwhile major milk processors Dean and HP Hood, which is part-owned by DFA, enjoy the economic benefits."
The suit follows a summer of suffering for dairy farmers in Vermont and elsewhere in the Northeast.
In Vermont, milk prices paid to farmers dropped to about $11 per 100 pounds in June from $19 a year earlier. Meanwhile, production costs remain about $17 per 100 pounds.
The price plunge has put the state's $2 billion-a-year dairy industry on the brink of collapse. Vermont has lost more than 250 dairy farms in the past five years, and they're going under this year at a rate of about six a month, state officials said.
How can any of them stay in business?
blame big milk
It ain’t easy to stay in business. How can ANY small farmer stay in business these days? The deck is stacked against us. In reality, you can only grow to be ‘so big’ before some corporation notices you and comes gunnin’. So, my advice is to stay under the radar. HEck, that’s my advice for just about anything in life, LOL!
“A message left at Dean Foods was not immediately returned.”
Dean Foods left town a while ago. Closed up shop unexpectedly and we lost about 200 jobs. I wouldn’t trust them any further than I could throw them, so these people may have a case. *SHRUG*
Dean Foods has about a 15% market share.
Dean Foods couldn't stop high prices in 2007 and 2008. During that time, these farmers bulked up. Now prices are down. Welcome to the club, guys. Things aren't as good as they were two years ago.
Oh, there have been dairy price supports in the USA since the 1930s. If 70 years of government intervention hasn't worked, maybe these farmers need to find something else to do that's more productive, so that we don't have to keep supporting them.
Yes, all of the consumer saw all of those honest grocery stories pass along the price drop . NOT!!
Another case of the middle men bilking both sides.
Hard work and the taking of no money out of the business. And then not forever.
War is being waged on the free enterprise system. Guess who the enemy is?
Government subsidies were originally created to deal with these cycles.
Bumper crop, you can't get squat for it, scarcity and consumers will pay through the nose, but you ain't got any to sell, solution storage, (not so easy with milk, so it's a cheesy solution.
Everybody must be smart, producers must plan and expand carefully, bank some profits for low production years, consumers must be willing to purchase more heavily in times of plenty and incorporate plentiful items into diet. There must be enough direct marketing to keep middlemen in control. Government must be careful of costly over regulation.
I have some dear friends who were in the dairy business for years (just him and his wife on a small farm, about a hundred head of Holsteins/Jerseys)—this happened here in east Texas as well, and they finally got sick of it, sold all the milk cows and changed over to beef cattle instead. This kind of thing just isn’t fair to ‘mom and pop’ operations! :-(
“Government must be careful of costly over regulation.”
Oh, you dreamer, LOL!
Actually, you made some good points. But, I married into a farming family so I’ve seen it all in the past 20 years. This year, we’re not getting squat for corn. 70 cents a bushel! Seventy cents! We are in red ink this season, so I know exactly how those dairy farmers feel.
However, we’ll do it all over again NEXT year...because we’ll make a little money, LOL!
“How can any of them stay in business?”
We had to sell the dairy cows about five years ago. When DH was growing up, the dairy cows carried the farm. When we sold out, they were a drain. This was a herd his dad and grandpa had developed for about 60 years.
To see milk prices that low again really hurts because in the meantime, all input prices have gone up. Especially feed costs.
Those of us who milked 40 or 50 or 100 cows have a hard time competing with factory farms like Horizon Organic, which has a couple of 5,000-cow herds.
The dairy areas would have a network of associated businesses — cow vets, milk haulers, livestock auctions, truckers, dairy supply companies, refrigeration repairmen, nutritionists and feed consultants, etc. With fewer farms the network begins to unravel.
Oh, well. Progress, I guess. Now we sell hay to horse owners.
I knew I wouldn't get that one by you.
Additionally, I was referring to ONLY reasonable food safety regulation.
I did not address the Marxist private property confiscation program commonly known as the Endangered Species Act.
But then, when we put the farmers out of business we will feed the proletariat with Soylent Green made from environmentalists. They served their purpose.
Nah. Those of us that know how to grow food, hunt, glean from nature, bake bread from scratch and can sew on a button will ROCK the little world of the pea-brained socialists when the time comes.
Or else we’ll be loaded into the train cars first. ;)
In a sick sort of way, I’m looking forward to the day when the ‘elite’ jump off of tall buildings when it all goes to heck and they have no more money. ;)
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