Dairy Farmers of America (Dfa) has settled a class action lawsuit accusing the cooperative of conspiring to control the raw milk market in the southeastern US.

DFA will pay US$140m to the plaintiffs. An additional, refundable $9.3m per year for two years will be placed in a fund to “incentivise stronger Class I utilization rates in Federal Orders 5 and 7”, the cooperative said.

If the agreement receives court approval it will mean that DFA will avoid going to trial over the claims. Trial for the suit was scheduled for later this month.

This is the third settlement reached in the case, which saw Dean Foods previously reach an out of court settlement.

DFA emphasised that the deal is not “an admission of wrongdoing”. 

“Our Board and management team have worked diligently to put certain old issues behind us,” said Rick Smith, president and chief executive officer. “This outcome positions DFA to fulfill a commitment to our members to resolve pending litigation, to remove a source of distraction for our leadership and to avoid additional legal fees.”