Thursday, September 8, 2016

Not Your Average Price-Fixing Scheme

The “herd retirement program,” as it was called, was led by Cooperatives Working Together, run by the lobbying group National Milk Producers Federation, and supported by farms producing almost 70 percent of America’s milk. Individual cooperatives sued included Dairy Farmers of America Inc., Land O’Lakes, Dairylea Cooperative Inc., and Agri-Mark Inc.
The consumers claimed that between 2003 and 2010 the cooperatives paid above-market prices for dairy cows owned by member farmers, and sent them to be slaughtered before they would have otherwise. Cut the supply, the price will rise, right? But things get weird when you look at the industry’s performance. Since 1975, the U.S. government says overall American dairy consumption has gone from 539 pounds per person per year in 1975, to 627 pounds in 2015 (though fluid milk sales have dropped precipitously). So why does anyone need to boost prices when people can’t seem to get enough non-fat Greek yogurt?
Those defendant cooperatives, as we mentioned, are made up of dairy farmers both large and small. The farmers sell their milk through the cooperatives to huge dairy processors (the folks who make your favorite yogurt), who then sell to retailers (your local supermarket). Gary Genske, treasurer of the National Dairy Producers Organization, says the processors often demand more milk from the cooperatives than is actually needed, creating a glut and driving the overall price of dairy down (which of course benefits the processors and hurts the farmers). “We have far too much product for what the market wants,” Genske said.
So—according to the complaint filed five years ago in San Francisco federal court—the cooperatives came up with a way to fight the glut and boost prices. Kill hundreds of thousands of cows.
I'm not sure I buy into this claim, but I also don't buy into the claims of the class-action lawyers in the Syngenta case, either, and God knows thousands of lawyers are looking to get rich on that bullshit.  As it is, it is pretty clear that there are way too many cows producing way too much milk right now.  The world is drowning in milk and cheese.