US milk consumers seek $52m from dairy companies in price-fixing antitrust settlement

By Mary Ellen Shoup contact

- Last updated on GMT

Related tags: Dairy companies, Milk

US milk consumers sought preliminary approval from a California federal judge for a $52m settlement in an antitrust suit alleging that US dairy companies paid dairy farmers to kill cows in order to artificially raise prices. 

The $52m-settlement amount represents approximately 30% of the plaintiffs’ total estimated damages and was the result of five years of litigation between the two parties.

Five years of back and forth

The complaint, first filed in 2011, specifically alleged that the dairy companies, which included the National Milk Producers Federation, Agri-Mark, Dairyleas Cooperative, Dairy Farmers of America, and Land O’ Lakes, took coordinated efforts since 2003 to limit the production of raw farm milk through premature “herd retirements” ​in order to increase the price of raw farm milk, used in a wide amount of dairy products.

This group of dairy companies were also called the Cooperative Working Together (CWT), a voluntary dairy herd removal program implemented by U.S. dairy cooperatives from 2003 through 2010 in an effort to reduce the aggregate milk supply and increase the amount of money dairy producers received for milk. Through the program, participating cooperatives bought out herds from dairy farmers, who were then required to sell their entire herds to slaughter and not re-enter the dairy farming business for at least one year.

The lawsuit claimed these dairy companies, which account for nearly 70% of US milk production, illegally conspired to raise market prices, costing consumers $9.55bn in inflated milk prices. Dairy companies were denied the motion to dismiss the allegations in 2012.

Protecting class members

The plaintiff defines a class member as a consumer who purchased fresh milk products (e.g. cream, half & half, yogurt, cottage cheese, and/or sour cream) between 2003 and 2012 as a resident of the following states and the District of Columbia:

Arizona, California, Kansas, Massachusetts, Michigan, Missouri, Nebraska, Nevada, New Hampshire, Oregon, South Dakota, Tennessee, Vermont, West Virginia, and Wisconsin.

As part of the motion, a case-dedicated website will be established, www.freshmilkpricefixing.com​, to educate and provide reliable information to consumers about the industry-wide issue.

Next steps

U.S. District Judge Jeffrey S. White, who is presiding over the case, said he would hold the motion in abeyance for one week so the purchasers could incorporate some recommended changes to the legal notice of settlement.

A hearing for preliminary approval will be held August 26.

Related topics: Markets, Fresh Milk, Pricing Pressures

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