Last week, U.S. District Judge J. Ronnie Greer heard arguments from attorneys on issues of disclosure of confidential information and granting class-action status to the plaintiffs of an antitrust lawsuit that is being brought by several dairy farmers against dairy co-ops, including Dairy Farmers of America and Dean Foods Co.Farmers from as far away as Clinton, Arkansas traveled to Greeneville, Tennessee to ‘“ . . .see justice done,”’ according to Tonya Kuny of Wellsland Dairy. The antitrust case was first filed in February of 2006. In 2007 it was updated to add more plaintiffs. While the case involves Southeastern dairy farmers, the precedential impact from the case could affect the dairy industry nationwide.
According to Hugh G. Willett’s article for the Knoxville News Sentinel, the farmers brought the lawsuit to change the way dairy markets operate. As John Harrison, a dairy farmer from Loudon County, Tennessee stated, ‘“They’ve fixed the price of milk in the Southeast so that no one’s competitive anymore.”’ Harrison and other farmers are worried their operations will go under given the current market conditions. That is exactly what happened to Tonya Kuny of Clinton, Arkansas when her “60-year-old dairy recently went out of business after losing $3 million in the last year [.]”
Farmers argue that right now the price they are getting per hundred-weight does not cover their costs, noting that over the last couple of decades feed costs have risen by 40 percent and fertilizer is 200 percent more expensive. The Farmers believe the dairy industry is setting the price for milk to low for dairy farmers to maintain viability. John Campbell, an area farm management specialist for the University of Tennessee acknowledges that the current supply-and-demand situation is threatening dairy farms. While acknowledging that consolidation in the milk-process industry has reduced competition, supply and demand is still the biggest problem facing farmers in Campbell’s opinion.
Again, arguments last week focused on confidential information and class action status. The plaintiffs want class action status because of the number of plaintiffs there are ( “as many as 4,500 dairy farmers across the South”) and because the complaints are similar. For their part, the defense counters that each dairy farmer has an individual contract that is at issue and that “market forces have determined the pricing structure.” Judge Greer has decided to hear arguments in the case on December 10, 2009.
To read Willet’s article click here.
Posted: 09/15/09
