Yesterday, this blog did a post on the ongoing antitrust lawsuit between several dairy farmers and dairy co-ops. Now, the United States Senate is starting to look into the issue of dairy prices with a little more vigor. Yesterday Senate Democrats “said they would investigate whether a few companies are monopolizing the dairy industry and keeping retail milk prices high, even as struggling farmers cope with falling revenue.”According to New York Senator Charles Schumer, ‘“dairy farmers are in the worst shape I’ve ever seen.”’ The Senator is concerned that without providing the farmers with some immediate financial assistance then several farms will ‘“ . . . go under[.]”’ In 2007, dairy prices were $21.70 per hundredweight, according to Jennifer A. Dlouhy’s article for the Houston Chronicle. Now farmers are getting less than $12 per hundredweight. This is a bad reality for dairy farmers as one financial services firm estimates it cost more to produce a hundredweight of milk (roughly $17.58) than the farmer can hope to recover at the market.
This is why Senator Patrick Leahy (VT), Chairman of the Senate Judiciary Committee, plans to hold a field hearing this coming Saturday in St. Albans, VT to look into ‘“the state of competition . . . in the Northeast dairy industry [.]”’ Officials from both the Justice and Agriculture Departments will testify. Specifically, Leahy is interested in the disparity between what milk costs at the store (roughly $3 a gallon) and what farmers are being paid. Leahy is also concerned that anti-competitive actions might be behind the disparity, and he is concerned by ‘“the fact that the market is controlled by a couple of monopolies . . .” Dallas-based Dean Foods Co., may end up being one of the top targets of any hearings, just as the company is major part of the antitrust lawsuit.
Congress and the government have taken some steps, as of late, to try and provide some relief to the struggling dairy farmers. For instance, US Department of Agriculture Secretary Tom Vilsack “temporarily increased the amount the government pays for nonfat dry milk and cheddar purchased through its Dairy Product Support Program — an increase that will cover August through October.” Additionally, last month the Senate voted for a measure that provides an additional $350 million to the Dairy Product Support Program, but similar language was not a part of the House’s bill. Regardless, Senator Bernie Sanders (VT) and Schumer said they will push to keep the measure intact during negotiations on a compromise bill.
To read the Houston Chronicle article click here.
Posted: 09/16/09
