Dairy farmers, stung by a price-depressing glut of milk, are pressing federal antitrust regulators to investigate competition in the industry.
A group of dairy farmers is slated to meet with antitrust enforcers Thursday in Washington, and Christine Varney, chief of the Justice Department’s antitrust division, is scheduled to appear Saturday at a Vermont hearing of the Senate Judiciary Committee, which is populated with several Democrats from big dairy states such as Wisconsin, Minnesota and New York.
The price of milk began a historic run-up in 2007, and dairy farmers raced to cash in by expanding their herds. Then, the global recession doused foreign demand for milk in 2008, contributed to an oversupply.
In the past year the price farmers get for their milk has dropped 36%, to the lowest level in three decades.
Between early 2007 and December 2008, U.S. farmers added about 190,000 milk cows, an increase of 2%, according to industry economists. In August, farmers on average were paid $11.80 for every hundred pounds of milk, down from $18.40 in August of last year.
Dairy farmers have long complained that they have too few buyers and too little competition for their milk. The industry is dominated by two players: Dean Foods Co. of Dallas, which is creating a national brand in what had been a fragmented industry, and Dairy Farmers of America Inc., a Kansas City, Mo., cooperative that buys milk from farmers and sells some of it to Dean Foods.
In a statement, Dean said it "does not control dairy prices or the dairy market. The numbers that have been reported by various media are grossly inaccurate. We buy less than 15% of [the] nation’s raw fluid milk supply."
Dairy Farmers of America said in a statement: "The national scope and size of our cooperative brings about scrutiny. We understand that and we invite open dialogue with those who want to understand our business better."
Andy Gilbert, a third-generation farmer in Potsdam, N.Y., who owns 800 milk cows, said farmers are struggling and he is borrowing to pay his bills. "I
Don’t Cry Over Spilled Milk
by ilene - September 17th, 2009 1:55 am
Don’t Cry Over Spilled Milk
Courtesy of Mish
Milk prices have plunged in recent weeks. Farmers in big dairy states like Wisconsin, Minnesota, and New York are hopping mad. Is there a conspiracy underway to suppress milk prices? Some must think so because Dairy Farmers Want Industry Probe.
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW.