Dairy Farmers of America Hit with Lawsuit in the Northeast
Once again, Dairy Farmers of America (DFA) is being sued. This time over an alleged attempt to control the Northeast milk market.
The lawsuit, S.R.J.F. Inc. v. Dairy Farmers of America, filed on July 29 in the U.S. District Court in Vermont, claims that DFA has created a market that has many sellers, but only one single buyer—a monopsony—across Vermont and in 10 other northeast states. Mainly it claimed that DFA has attempted to suppress any competition and reduce the price paid to dairy farmers for their milk.
DFA’s senior vice president for corporate affairs, Kristen Coady, argues the cooperative has strategically invested in processing plants to ensure milk markets and increase returns on members’ investment.
“Any claim that a farmer-owned, farmer-governed cooperative is motivated to self-inflict damage on its member-owners is preposterous, irrational and blatantly inaccurate,” Coady remarks.
The lawsuit says that DFA has come to control as much as 60% of the Grade A milk market in the Northeast since May 2016. Court documents point to one estimate from June, that the cooperative controls 85% of the region’s fluid milk processing capacity.
The lawsuit estimates approximately 7,000 possible parties are touched, including anyone who has sold non-organic, Grade A milk since May 10, 2016, in the cooperative’s 11-state Northeast region. This includes parts of Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, New York, New Jersey, Maryland, Delaware and the majority of Pennsylvania.
St. Albans Cooperative Creamery
Used as evidence of DFA’s efforts to get rid of competition, the lawsuit outlines multiple past acquisitions and merges involving DFA’s merger with the St. Albans Cooperative Creamery in 2019.
Some past St. Albans members claimed they had no other choice but to go with DFA, as to why they voted to join DFA back in 2019. The plaintiffs cited the St. Albans merger as a reason why they filed the lawsuit in the U.S. District Court in Vermont.
“Like the arsonist taking credit for putting out the fire, DFA has sought to spin its actions as saving or stabilizing the Northeast Dairy Market it was hellbent on bleeding to death,” the lawsuit said.
The lawsuit documents data from Vermont, showing a 37% decline in the total number of operating dairy farms from 2010-2020 and highlighting 40 dairy farmers closed in the state in 2020.
Timespan
- In 2017, DFA said it would stop marketing milk to independent farmers who had supplied co-op subsidiary Dairy Marketing Services unless they joined DFA.
- In 2019, the 100-year-old St. Albans Cooperative Creamery voted to become part of DFA.
- In 2020, DFA acquired most of Dean Foods’ plants as that company went through bankruptcy proceedings.
- In 2021, DFA signed a supply agreement with the parent company of ShopRite grocery stores. As a result, the lawsuit says, the company decided to close its Readington Farms plant in New Jersey, and its 150 independent suppliers were given the opportunity to join DFA.
- Earlier this year, DFA purchased Greene Trucking Inc., a milk hauling company that served New York and Vermont.
A statement by DFA shares, “We will, as we always have, continue to make decisions and take actions that are in the best interest of our farmer-owners — now and for generations to come.”
