The Milwaukee Journal Sentinel reports, Secretary Vilsack stated that USDA was hearing "a consistent message, which has not always been the case. Dairy producers, large and small are hurting." Vilsack continued, stating that "[i]n the past 10 years, the number of U.S. dairy farms has fallen from 111,000 to fewer than 65,000." This change has come partially "from farm consolidations and voluntary retirements. But most of the loss has come from farmers who have been forced out of business, especially in the past two years."
Farmers raised concerns over milk prices and the method for the farm milk pricing system. The price of farm milk is determined by "the price of cheddar cheese blocks" on the Chicago Mercantile Exchange and "a few Mercantile traders can influence milk prices by selling or buying cheese at strategic moments", according the Sentinel.
Christine Varney, Assistant Attorney General for the Justice Department's Antitrust Division, and Secretary Vilsack "said that they were interested in the farmers' complaints about the Chicago Mercantile Exchange."
Additionally, "farmers currently get about 97 cents from a gallon of milk sold for $3 at the grocery store. The rest of the money goes to the store, processor and other involved in the handling, buying and selling of the product."
Some voiced concerns over large cooperatives and milk processors that have increased their market share recently. The Associated Press reports that "Dairy Farmers of America [DFA], a co-op that has 17,000 members, and the nation's largest dairy Dean Foods, are defending themselves in a pair of class-action lawsuits filed in the Northeast and Southeast alleging that they engage in price fixing. In April the DFA was sued ... alleging that it engaged in a conspiracy to manipulate the cheddar market at the Chicago Mercantile Exchange."
The Sentinel reports that the growth of Dairy Farmers of America causes farmers to be "pressured to join the co-op or they're not in a position to sell their milk." DFA, who sent "$37 million in special aid to its members to help them through hard times" last year, denies these allegations.
To read the Associated Press story, click here.
To read the Milwaukee Journal Sentinel story, click here.
Posted: 06/28/2010
