November 10, 2011

Class Action Accuses Dairy Producers Of Reducing Herds To Increase Milk Prices

A class action filed in the Northern District of California on behalf of U.S. consumers of milk and other dairy products is alleging that dairy producers prematurely slaughtered more than half a million cows to drive up the prices of dairy products.

The plaintiffs in Matthew Edwards et al., v. National Milk Producers Federation, aka Cooperatives Working Together et al. allege that from 2003 to 2010 several dairy companies and trade groups, including Land O’Lakes, Dairy Farmers of America, Agri-Mark, Dairylea, National Milk Producers Federation, and Cooperatives Working Together (“CWT”), engaged in the premature slaughter of cows as part of a scheme to raise the price of milk and other dairy products by decreasing the supply of milk. 

The plaintiffs claim that defendants manipulated the supply of milk which led to higher prices through “herd retirements” coordinated by the CWT.

Dairy farmers in every state participate in CWT, producing almost 70% of the nation’s milk.  Dairy farmers submit bids for the price at which they sell their herds for slaughter through the retirement program.  The plaintiffs allege that more than 500,000 healthy cows were slaughtered prematurely under the program which reduced the supply of milk by approximately 10 billion pounds and resulted in a $9.55 billion total increase in the price of milk.

CWT members say that the program, which ended in 2010, was created to assist dairy farmers who were losing money and that the program operated in full compliance with the antitrust laws.

The dairy price-fixing class action lawsuit is brought on behalf of U.S. consumers who purchased milk and other dairy products (including cream, half & half, yogurt, cottage cheese, cream cheese and sour cream) from 2004 through the present.

Categories: Antitrust and Price Fixing, Antitrust Litigation

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