Dairy consumers in Kansas, 14 other states and Washington, D.C. who bought milk and other fresh dairy products from their grocery stores between 2003 and present day might be eligible for a piece of the $52 million settlement that many of the nation’s largest dairy producers agreed to pay after an antitrust class-action lawsuit was filed against Cooperatives Working Together, “a program designed exclusively by America’s dairy farmers for the benefit of America’s dairy farmers.”
The lawsuit alleges the National Milk Producers Foundation, also known as Cooperatives Working Together, and its members, including Land O’Lake Inc., Dairy Farmers of America, Dairylea Cooperative Inc. and Agri-Mark Inc. worked to limit the production of milk through premature “herd retirements,” thus leading to the premature slaughter of over 500,000 dairy cows between 2003 and 2010 in an attempt to reduce the milk supply and inflate the prices of dairy products.
“The purpose and effect of the herd retirement program was to reduce the supply of raw farm milk in order to increase its price, which in turn increased the price paid by consumers for milk and other fresh milk products,” the lawsuit states. “By all accounts, the herd retirement program was a huge success for CWT and its members. CWT financed ten rounds of herd retirements from 2003 to 2010 … reducing the nation’s milk supply by approximately 10 billion pounds.”
According to Carrie Mess, who is well known in the dairy industry through her account “Dairy Carrie,” the fund the cooperatives came together to create was to help the dairy industry better balance their supply and demand.
“Farmers who were ready to retire from dairy farming could apply for the buyout and if they were accepted, the fund would pay for their cows and they could retire from dairy farming,” Mess said in her blog. “Usually when a farmer retires from dairy farming, their cows are sold to other dairy farmers. However that doesn’t help reduce the amount of milk, so the cows from farms bought out by the fund were slaughtered for beef.”
By allegedly manipulating the supply of raw farm milk, the lawsuit states, the actions of Cooperatives Working Together resulted in a suppressed price competition, which resulted in artificially high prices of fresh dairy products throughout the United States.
“As a result, indirect purchasers of milk and other fresh milk products have paid supra-competitive prices,” the lawsuit states.
Reaching a settlement
The National Milk Producers Foundation released a statement on Jan. 18 on behalf of Cooperatives Working Together’s settlement agreement in the class-action lawsuit.
“Our CWT leadership team, with support from the CWT membership, has worked diligently to put this legacy issue behind us,” Jim Mulhern, president and CEO of the National Milk Producers Foundation, said in the statement. “Settlement of this litigation is the most sensible and responsible course of action to maintain the current CWT Export Assistance program and allow us to focus on the future.”
Jill Seiler, senior in animal sciences and industry and agricultural communications and journalism, grew up on a dairy farm, but her dairy is not a member of the cooperatives named in the lawsuit.
Cooperatives Working Together will pay $52 million under this settlement agreement to the plaintiff class through both cash and in-story loyalty cards that are to be used to purchase fresh milk products.
“The lawsuit against the dairy cooperatives was brought by an animal rights organization,” Mess said. “They alleged that the cooperatives working together to establish this fund was equal to price fixing. I personally don’t believe the organization cared anything about price fixing and instead used this lawsuit as a way to try and hurt dairy farmers.”
No admittance of wrongdoing
In the National Milk Producers Foundation’s statement, Mulhern said CWT makes no admission of wrongdoing by taking this settlement.
“It is important to note that the court has found no antitrust violation…,” Mulhern said. “The activity at issue in this litigation — the herd retirement program — has long since been terminated by CWT.”
Seiler said the dairy farmers who did opt into this program more than likely did so because of the poor prices seen in agriculture, especially within the dairy industry.
Mess said instead of going to court and spending the money it would take to fight the claim, Cooperatives Working Together settled and established a fund to pay customers who do file a claim.
Mulhert said Cooperatives Working Together is “poised for a quick rebound and a strong future” and will continue to help their members with creating new market opportunities and looking for innovative ways to increase the sales of fresh milk products.
Those who bought fresh dairy products, including milk, yogurt, cheese and ice cream, in one of the 15 states or the District of Columbia from 2003 to present day can file a claim at www.boughtmilk.com.
“The amount of money dairy farmers have paid into the fund is already set,” Mess said.
The fund is set at $52 million and, according to BoughtMilk, the official website for the Fresh Milk Products Price-Fixing Class Action Lawsuit, individuals may receive between $10 to $20 and entities can expect an amount between $280 and $560.
This amount may change depending on the number of individuals and businesses who file a claim.
“More people applying to get a rebate won’t cost farmers more money, it will just result in the amount being divided into smaller amounts,” Mess said. “My personal request is if you want to help support farmers in this, go ahead and apply for your rebate. When the check comes, treat your family to ice cream or pizza with extra cheese with the money. Dairy farmers appreciate your support!”
The last day to file a claim is Jan. 31.