The dairy industry called it “herd retirement,” a pleasant phrase, summoning up images of old cows relaxing in a pasture somewhere in Wisconsin, their productive years behind them after a lifetime of service to a grateful milk, ice cream and yogurt-loving nation.
But it meant something else entirely, according to a class-action lawsuit. The cows were neither old nor unproductive. Indeed, that was the problem. They were capable of producing plenty of milk at a time of glut, thereby bringing down the price of dairy products for consumers.
And the “retirement” the industry had in mind for them was what most people call slaughter.
Over the course of seven years — in a scheme to hike up prices for milk products — dairy producers conspired to slaughter more than 500,000 young cows, the nationwide class-action lawsuit alleged.
The antitrust lawsuit accused dairy cooperatives — groups of farmers who serve as middlemen between farmers and dairy processors — of coming up with a scheme to limit the production of raw milk by paying farmers to prematurely kill off cows, otherwise known as price fixing, which is illegal.
Studies indicate that the “herd retirement program” — led by Cooperatives Working Together — worked. From 2004 to 2008, milk producers’ prices rose 66 cents per hundredweight of milk. By the end of the program in 2010, it was responsible for a cumulative increase in milk price revenue of $9.55 billion, the class action lawsuit claimed.
On Aug. 25, a group of the nation’s largest dairy producers agreed to pay $52 million to settle the lawsuit with no admission of wrongdoing.
And as part of the settlement, millions of milk consumers in 15 states and the District of Columbia could be eligible to claim cash.
But they need to act fast.
Until January 31, anyone who purchased milk or other fresh milk products, such as yogurt, cream cheese or sour cream, for their own use while living in Arizona, California, the District of Columbia, Kansas, Massachusetts, Michigan, Missouri, Nebraska, Nevada, New Hampshire, Oregon, South Dakota, Tennessee, Vermont, West Virginia or Wisconsin between 2003 and the present can submit a claim to receive a portion of the settlement.
Those entitled must have purchased the milk through a grocery store or other indirect retailer — not through the dairy producers themselves. The milk products also may not have been used for resale. However, consumers don’t need proof of purchase or residency to submit a claim. Individuals could receive between $10 and $20, although the payments may lower as more claims are received.
Steve Berman, managing partner of Hagens Berman, one of the law firms representing the plaintiff class, said in a statement that the settlement would “return some of what the consumers lost due to this massive fraud perpetrated for ill-gotten gains.”
“The biggest dairy producers in the country, responsible for almost 70 percent of the nation’s milk, conspired together in a classic price-fixing scheme, forcing higher prices for a basic food item onto honest consumers and families,” Berman said.
Cooperatives Working Together was developed by the lobbying group National Milk Producers Federation, which is composed of dairy giants including Land O’ Lakes, the National Milk Producers Federation, Dairy Farmers of America and Agri-Mark. It was founded in 2003 with the stated purpose of “strengthening and stabilizing milk prices,” according to the lawsuit, and its dairy producers are located throughout the country.
Farmers sell their milk through the cooperatives to the huge dairy processors, who then sell to retailers. As Bloomberg reported, processors often demand more milk from cooperatives than is actually needed, creating a glut and driving down the overall prices for yogurt, sour cream and other dairy products. In an effort to fight the glut and boost prices, the cooperatives resolved to kill hundreds of thousands of cows, the suit said.
With the reduction in the output of farm milk, milk prices were higher than they would have been with more competition. The program in effect put smaller farmers out of business while unfairly increasing the profits of agribusiness giants, the lawsuit stated. It removed a total of 506,921 cows from production and resulted in the elimination of 9.672 billion pounds of farm milk.
According to studies included in the lawsuit and performed by Scott Brown at the University of Missouri, each round of cow slaughtering “has effects that extend forward years into the future,” so that dairy farmers are still significantly profiting from previous “herd retirements.”
Cheryl Leahy, general counsel for animal rights organization Compassion Over Killing, said the group was “proud to have spearheaded the research” that led to this class-action litigation.
“Not only was the price of milk artificially inflated,” Leahy said in a statement, “but this scheme ultimately cost 500,000 young cows their lives.”
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