Dairy Cooperatives Killed Cows to Raise the Price of Milk
Dairy producers in the United States have settled a class action law suit for $52 million. The suit alleges that a number of large dairy cooperatives prematurely killed over half a million cows to raise the price of milk. These practices, first recognized by the animal rights group Compassion Over Killing, violated federal antitrust statutes, leading to inflated consumer prices for dairy products such as milk, yogurt, cream, and half and half. Because the law suit settled out of court, the dairy industry admits no wrongdoing. Instead, it settled and set up a consumer fund to compensate those who overpaid for their dairy products in several states since 2003.
Can You Make a Claim?
The defendant in the case is National Milk Producers Federation (NMPF). This conglomerate, which includes cooperatives such as Land O’ Lakes and DairyLea agreed to compensate consumers in the following states:
- Arizona
- California
- District of Columbia
- Kansas
- Oregon
- Massachusetts
- Michigan
- Missouri
- Nebraska
- Nevada
- New Hampshire
- South Dakota
- Tennessee
- Vermont
- West Virginia
- Wisconsin
In order to make a claim, you must have been a resident of one of those states between 2003 and the present and purchased dairy products. You don’t need to provide proof of purchase. At this point, all you need to do is go to BoughtMilk.com and fill out the claimant form certifying that you qualify for compensation.
At this time, there is no information on how much money each person can expect. The courts are simply gathering names in order to figure out the best way to distribute funds. You can read more about that process in the Full Notice of Settlement document, located at the bottom of the BoughtMilk claim form page.
The website is open for residents and former residents of the states listed above from now through January 31, 2017.
The Story Behind the Prices
For most consumers, the real story here is about the possibility of a class action claim. And, as a former resident of the state of Arizona, I jumped on that wagon and filled out the form myself. However, for those more interested in the story behind the lawsuit, get ready for a wild ride…
The crux of the issue (and the law suit) is the claim that America’s dairy cooperatives bought up herds of cattle from small farmers for what they called a “herd retirement program.” This is a fancy way to say small farmers sold off their cattle, which then became ground beef. In essence, by paying higher-than-market prices, the co-ops offered farmers a way to get out of the business in the black.
However, the decision to “retire” these dairy cows after that purchase was a bit premature and had major consequences. Basically, farmers and cooperatives sold and killed these cows before their milk-producing cycle came to an end. As a result, the supply of milk diminished and prices increased. In fact, according to industry records, the price of milk between 2003-2008, during the height of the herd retirement program, rose some $0.66 per hundredweight.
Unfortunately, what seems like a sinister scheme is far from straightforward. As Bloomberg News reports, the circumstances that led to the slaughter of some 500,000 dairy cattle were not so cut and dry. The cooperatives and the NMPF were in a fight against dairy producers who were buying up more raw milk than they needed in order to drive the price down.
It’s a twisty, turny tail of macroeconomics that is actually quite fascinating if you have the time to read it. If you don’t, though, take the time to fill out the form instead.