LOUISVILLE, Ky. -- Dairy farmers across the Southeast hope to prove what they claim is a conspiracy to drive down the price they're paid for milk. The lawsuit against Dean Foods and others is scheduled to be tried in June in U.S. District Court in Greeneville, Tenn.
Dairy farmer John Kalmey told The Courier-Journal of Louisville that there is no competition for milk in the Southeast. Kalmey said production prices keep climbing, and many farmers are barely breaking even. The farmers contend that Dean and cooperatives that are major buyers worked together to keep prices artificially low, in part by buying bottling plants and thereby limiting competition.
Dean spokesman Jamaison Schuler said that farmers have many outlets for raw milk at competitive prices and that competition flourishes in the dairy industry.
Dean Foods offered to pay $30 million in December to settle a similar case with Northeastern dairy farmers, but a Dean official said the company views the Southeastern case as separate.
In the lawsuit, the farmers claim Dean Foods and the other defendants tried to reduce competition and lower prices by working together by buying and closing milk processing plants. It also claims the defendants conspired by having Dean accept milk only from dairy farmers who joined the marketing associations the plaintiffs say are controlled by Dairy Farmers of America. Dean is the nation's largest milk processor, and Dairy Farmers of America is the largest milk cooperative.
Scott Williams of Taylorsville, a third-generation dairy farmer, had enough last fall and took a full-time job with the city water department.
"Milk just wasn't paying the bills and, as much as I hate to, I had to get out of it," Williams said.
Northeastern Dairy Farmers
According to an Associated Press article from last December, a group of Northeast dairy farmers sued Dean Foods and Dairy Farmers of America saying they sought to monopolize the market into which farmers had to sell their milk. Dairy farmers in the Northeast said they were forced to join DFA to find a buyer for their raw milk.
The group filed suit saying fixed prices created an economic crisis in the region’s dairy industry. A lack of competition in the dairy processing industry gave milk processor record profits while farmers received lower prices.
Dean Foods Co. paid $30 million and took additional undisclosed actions to settle allegations of monopolizing the dairy market in the Northeast. Dean Foods made the payment to settle the “purported class action antitrust lawsuit.”
Copyright 2011 The Associated Press.