… If a jury finds in the farmers’ favor, there could be wide-ranging implications for the dairy sector and other agricultural cooperatives…
Farmers' Case Against Giant Dairy Co-op Will Go To Trial
By Leah Douglas, Successful Farming
Agriculture.com - 10/2/2019
A collection of dairy farmers who allege anti-competitive conduct by the nation’s largest dairy cooperative will take their case to a jury trial. A U.S. district court judge late last week denied a motion for summary judgment — which would have wrapped the case up without trial — from defendant Dairy Farmers of America (DFA).
The group of more than 115 Northeastern farmers brought the suit against DFA after opting out of a prior lawsuit against the cooperative that resulted in a $50-millionsettlement in 2016. The lawsuit alleges that DFA and its marketing arm, Dairy Marketing Services (DMS), violated the Sherman Antitrust Act by conspiring to monopsonize the fluid milk market. Specifically, farmers allege that DFA and other cooperatives upheld an agreement not to poach one another’s farmer-members; shared information about how much they were paying farmers for raw milk in order to discourage competition, resulting in lower prices; and ensured that those low prices were maintained across the market by entering into supply agreements with top dairy processors, including Dean Foods, H.P Hood, Kraft, and others.
In her Friday ruling, U.S. District Judge Christina Reiss, who will preside over the trial, wrote that the plaintiffs put forward “admissible evidence from which a rational jury could conclude that DFA management favored growth of its commercial operations and empire building over the interests of its farmer-members.”
If a jury finds in the farmers’ favor, there could be wide-ranging implications for the dairy sector and other agricultural cooperatives. Currently, agricultural cooperatives enjoy an exemption from some antitrust scrutiny under the Capper-Volstead Act, a law dating back to when cooperatives were meant to shore up farmers in the market against pressure from powerful middlemen. The farmers in this case would have DFA’s behavior ruled beyond the scope of the antitrust immunity granted by Capper-Volstead. They would also have DFA’s supply agreements terminated...
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