Dairy Farmers of America (DFA) has taken sides against Dean Foods with the farmers that over a year ago filed a lawsuit against it over dairy prices in the state of Vermont.
In October 2009, an anti-trust lawsuit was filed against cooperative DFA and Dean Foods by 24 dairy farmers across the north-east of the US. The farmers accused the businesses of violating anti-trust rules and artificially depressing milk prices in the state.
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Farmers had been facing falling returns and, according to a US Senator for Vermont, Bernard Sanders, were losing US$100 per cow, per month.
However, while Dean Foods agreed to a settlement of $30m in December last month, DFA did not, and has now filed opposition to the settlement.
In a statement yesterday (19 January), the Kansas City-based dairy cooperative said it had now, together with Dairy Marketing Services (DMS), joined other defendants in protesting the settlement.
“We objected on behalf of our members because the attorneys for the entire class of dairy farmer plaintiffs have favoured one segment of the class while it penalises another segment,” said Brad Keating, COO for DFA’s operations in the north-east. “As the milk marketing entity representing many of the members of this class, we have a responsibility to ensure their interests are fully considered.”
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By GlobalDataIn its filing, DFA and DMS cite concerns that the settlement creates both “winners and losers” in the class of dairy farmers represented by a single law firm by “taking market access from one group of dairy farmers at the expense of another within the same class”.
The filing also describes how, if the settlement is approved, dairy farmers stand to incur financial damages by receiving a lower pay price for their milk.
DFA and DMS said Dean Foods’ proposed settlement, which is awaiting approval from a federal judge, gives the dairy giant the ability to “determine, in its sole discretion, the competitive market price at which it will purchase up to 60m pounds of milk per month from non-DFA and non-DMS sources for a period of 30 months”.
If approved, DFA and DMS said the settlement is likely to create “a downward ripple effect” on current pricing for milk purchases from DFA and other milk suppliers in the Northeast. In turn, other customers will make demands for price equality.
“This $30m settlement has been touted as a real win for dairy farmers,” said Greg Wickham, DMS general manager. “We believe the per-farmer award has been highly exaggerated, but more importantly, we believe the benefit of a small one-time cash payment is far over-shadowed by the long-term negative impact on farmers’ wallets.”
