Major Milk Buyer To Pay $30 Million In Dairy Suit

MONTPELIER, Vt. — A federal judge in Vermont is reviewing a proposed settlement of an antitrust lawsuit in which a major national milk processor would pay $30 million to Northeastern dairy farmers and change its milk buying practices in the region, at least temporarily.

The proposed settlement between farmers and Dallas-based Dean Foods, made public Friday, is "a major win for dairy farmers in the Northeast who have been squeezed by monopolization and price-fixing," said Benjamin Brown, a Washington-based lawyer for the farmers.

Dean Foods has begun to implement some of the changes sought by farmers, said company spokeswoman Marguerite Copel. She stressed that the company admits no wrongdoing, however.

In the proposed settlement filed in U.S. District Court in Burlington, Dean Foods said it would get between 10 percent and 20 percent of the raw milk it buys at three terminals in the Northeast from sources other than the Dairy Farmers of America cooperative and its Dairy Marketing Services affiliate for 30 months.

DFA and DMS also were named as defendants in the suit; they did not join the proposed settlement.

Farmers have complained for years that working together, Dean, DFA and DMS have come to dominate the milk-buying market and have held down the prices farmers are paid for their milk, making it difficult and sometimes impossible for many to remain in business.

"Economic concentration opens the door to anti-competitive practices that hurt farmers and consumers and skew dairy markets," Sen. Patrick Leahy, D-Vt., said in a statement. The settlement puts "big processors on notice that there's a price to pay for that."

The proposal calls for Dean Foods to place $30 million into a fund to settle antitrust claims brought by farmers and to broaden the sources for the milk it buys for plants in Lynn and Franklin, Mass., and in East Greenbush, N.Y., for at least 30 months.

Brown said the hope is that after the 30 months, Dean will not revert to its former practices because it will see the benefits of competition and realize the threat of more antitrust litigation.

The suit was brought as a class action, meaning between 5,000 and 10,000 farm families will have a chance for a share of the settlement fund remaining after the court approves the proposal and determines lawyers' fees and expenses, Brown said.

Monica Massey, vice president of communications for DFA, said the cooperative believes it has done no wrong and will continue to defend itself in the lawsuit.

"Further, the activities of DFA and other milk marketing cooperatives in the Northeast improved pay prices and the overall business climate for cooperative members and independent producers alike," she said in a statement.

Comments

[Fritziscool]

11:53 AM on 01/04/2011

The head of Dean foods was George Bush's partner in the Texas Rangers baseball team. Over the past dozen years or so, they skirted all the supposed anti-trust laws and acquired about 80 percent of the dairy operations in America. A few years ago Greg Engels got a divorce and throiugh some creative bookkeeping and a one time future payout to investors he was able to settle his divorce-with company money.

By the way in the past couple of years Dean Foods stock has tanked. The company spent billions of dollars acquiring big companies like" Silk soy" and "Friendship". What they did basically is gut those companies for cash and destroy their marketability.

Dean foods is about 4 billion in debt right now. There is talk that they will have to sell off about 35 of the companies that they bought with other peoples money.

[krumudgen]

01:56 PM on 01/03/2011

these big dairy companies back stab each other when convenient but also conspire when they can to keep milk suppliers under their thumbs. BORDEN dairy made a big mistake years ago when they conspired with other suppliers down south to price fixing school milk programs ,uncle sam forbid any contracts with bordens for years . thats why bordens milk and products disappeared.no free milk program or any military commiceries contracts.

[No1 ILoveLucyFan]

10:58 PM on 12/31/2010

Clearly, they took a page from the big oil companies.

[GerryS]

12:35 PM on 12/29/2010

Dean Foods- is that Jimmy Dean??

[jsarets]

09:19 PM on 01/01/2011

No. Jimmy Dean is owned by Sara Lee.

Dean Foods is the largest dairy conglomerate in the world. They own a tremendous number of regional and store brands, plus notable national brands such as Horizon Organic and Silk nondairy milks.

[elcerritan]

03:40 PM on 12/28/2010

Here's a news article from last year that does a better job of explaining what this law suit was about: http://www.npr.org/templates/story/story.php?storyId=112002639

[MuchMadness]

02:41 PM on 12/28/2010

How large are the dairy farms that are in the DFA cooperative?

[elcerritan]

07:20 PM on 12/28/2010

According the DFA's website, the farms range in size from 50 cows to 3000 cows. DFA is a nationwide organization, not limited to the area involved in this lawsuit.

[kareemachan]

01:38 PM on 12/28/2010

"Dallas-based Dean Foods"

Figures.

[Diggsdad]

02:35 PM on 12/28/2010

Maybe if Deans would lobby heavily for secession from the Union they could ignore these regulations. Once Texas secedes, does that mean they are on their own militarily when terrorists strike?
I can't wait. All the poor leave for other states and leave the rich to defend themselves against terrorists. Tuck and run plutos.

[SusanElizabeth1949]

04:11 PM on 12/28/2010

Dean Foods poisons everything they touch, remember what they did to the Silk brand after they acquired it? I don't use soy products but what they did was nothing short of fraud till they got caught.

[giono]

10:16 AM on 12/28/2010

Small farmers need to be preserved -- hopefully this is just the first of many that will return some equity to our agricultural system.

[HazelPethigFan]

12:19 PM on 12/28/2010

And just where are you going to find the small dairy farmers that want to return this daily dairy grind? You perhaps?

It's no secret in dairy country that many get out of dairy willingly. I know of many many dairy barns sitting empty. Not one of the farmers I know who got out complained about some "Big Ag" conspiracy forcing them out. The reason for getting out are varied: financial, health, age, children do not want to do it, and the lure of urban jobs that have vacations and larger pay for sitting at desks doing much less work.

If you want small farms preserved, you need to do it. Actions are needed. You can't just read about it on a blog with anti-modern agriculture agenda like this one. This blog is full of urban blowwhards who know absolutely nothing about agriculture. This blog is so backwards that it even promotes obsolete farming practices that even the Amish don't do anymore. .Amish even now use GM crops. How often do you read THAT on HPost?

[giono]

12:57 PM on 12/28/2010

For a start -- how about paying them a living wage ???

[SitandStay]

01:10 PM on 12/28/2010

Obviously if the courts accepted the complaint (suit) to go forward, then they have a viable argument. Bully and kudos to those that will use our legal system because that is what keeps our constitution alive and viable.
I didn't see anything in the article about the farmers being subject to your arguments. It's not much different than outsourcing a persons job to another country, when there is no work at a living wage, which that may speak to your comment. Feed is much higher now along with everything else.
What do you propose the difference in modern and obsolete farming methods are? I saw nothing that indicated the size of the farms filing suit, so I'm not sure how that is part of the argument.
Small farms do need to be preserved and if you buy local then it is possible what would be considered an obsolete method the farmer uses...i.e. without combines? As a matter of fact, we have a small 4-5 acre farm, organic, in the city of Fairburn Georgia that sells to the community. But if these other farmers were entitled to be included in a national market and squeezed out, they very possibly deserve compensation.
I hope they are very successful.