Thursday, January 24, 2013

Big milk processor in Southeast settles lawsuit by dairy farmers alleging price-fixing

Dairy Farmers of America is paying a $158 million settlement after a decade-long, class-action lawsuit by Southeastern dairy farmers who alleged the co-operative was involved in price-fixing. DFA President Rick Smith said during a conference call this week that the settlement "will not affect our day-to-day operations or our ability to market members' milk," Agri-Pulse reports.

The lawsuit was brought by 7,000 dairy farmers in 14 states, who argued that DFA and Dean Foods colluded to force dairy farmers into marketing contracts with DFA, closing off alternative channels, and then provided milk to Dean at bargain prices. Dean reached a settlement with the plaintiffs several months ago.

The latest settlement calls for DFA to pay $140 million to the plaintiffs. An additional $9.3 million a year for two years will be put into a fund to guarantee stronger Class I milk utilization rates in the two milk marketing orders. Smith said DFA received some indication that the suit might be dismissed, but when it was clear that wasn't going to happen, the risk of going to trial was too high, and that prompted the decision to settle. The settlements bring the combined award total to more than $300 million.

Agri-Pulse is only available by subscription, but a free-trial can be accessed here.

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