Big Dairy Accused Of Pricefixing Milk By Paying For Cows To Be Killed

A new class action lawsuit accuses several dairy industry juggernauts of paying mainly small farmers to send their entire herds to the slaughterhouse in order to reduce the supply of milk and jack up milk prices.

The lawsuit contends that a national trust of dairy trade groups, Cooperatives Working Together (CWT) funded a “dairy herd retirement” program which sent 500,000 cows to slaughter in order to boost milk prices from 2003-2010. CWT’s own website (PDF) says the initiative increased profits by $9.5 billion for agribusiness.

In 2010, a similar lawsuit against Land O’ Lakes accused the company of fixing egg prices by paying for poultry flocks to be thinned under an “animal welfare” program. That case settled for $24 million.

Read the lawsuit (PDF)
Dairy Price-Fixing [HBSSLAW]
COK Uncovers $9.5 Billion Price-Fixing Scheme: National Milk Producers Federation and Other Dairy Industry Groups Accused of Antitrust Violations [COK]

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  1. keepher says:

    Poultry herds?

  2. mauispiderweb says:

    What kind of thinking is this? What century are we living in? Damn.

  3. AlteredBeast (blaming the OP one article at a time.) says:

    This is udderly horrifying.

  4. Wasp is like Requiem for a Dream without the cheery bits says:

    That’s some tasty genocide.

  5. Coffee says:

    The next big bovine ad campaign: drinc mor ornaj jus

  6. NickJames says:

    Got Blood?

  7. FreeMarketFan says:

    What’s the problem?

    The farmers made their money by selling the cows, which came from smaller farms that probably could use the money anyway. And the cost was passed on to the consumer.

    Supply & Demand. If the supply outweighs the demand you either let the price reflect it or you adjust your manufacturing accordingly so the demand and cost stay where you want them to. I see no problem with this.

    • SNForrester says:

      We’re supposed to have competition as a force to keep prices down. When suppliers work together to reduce supply and raise prices, it’s bad for the consumers. It’s the reason why monopolies are supposed to be illegal.

    • Tim says:

      That’s all well and good when it’s one person or one company doing it. But when a large group of market actors conspire to raise prices, it’s calling price fixing, and it’s illegal.

      It’d be like if I owned a skating rink, and I met with all of the skating rink owners in the area and we all agreed to raise our prices by 20%. It’s anti competitive because the customers have no choice but to pay 20% more than they did before.

    • Nobody can say "Teehee" with a straight face says:

      The problem is that it’s price fixing. It’s a pretty serious issue in a place that wants a free market.

    • sponica says:

      for starters, collusion to inflate prices is illegal

      secondly, when there are hungry people….whoops I mean food insecure people…colluding to inflate milk prices is just wrong unless at the same time it decreases the price of beef products

    • pop top says:

      You don’t think committing a crime is a problem?

      • Coffee says:

        In the free market, economic forces drive supply and demand until there is no crime. It’s a perfect system.

        • consumeristjohnny says:

          So in your moronic view a monopoly is ok. The free market fails to force people from doing the right thing. If Pepsi went to Coke and said we will charge the exact same thing, IT IS ILLEGAL. They watch each others prices to be competitive, but they can not discuss it. If you want a free market, then the factory farms would sell their product on the OPEN FREE MARKET in much the same way the small farmer does. Instead they ARTIFICIALLY changed the supply in a clearly illegal manor.
          You really have no clue about the law and even less about the constitution and the failure of “free markets”.
          By the way, slavery was also a “free market” concept. Are you for it?

        • PsiCop says:

          Collusion is not an “economic force.” It’s an artifice, an outside influence. A market which has been corrupted by collusion is not a “free” market. In fact, it’s the opposite … it’s controlled by outside forces and those within it are not actually “free” to do what they want; they have to conform to the manipulation going on within it.

      • Jawaka says:

        Is it a crime? I thought that it was only a crime if it were considered a vital resource.

        • Coffee says:

          You’re thinking of price gouging.

          Price fixing through collusion is a violation of the Sherman Antitrust Act.

          • Jawaka says:

            Well then I want to know how come both Coke and Pepsi 12 packs cost the same thing in all of my local grocery stores (before store sales). I smell a conspiracy.

    • Doubting thomas says:

      please. Please, PLEASE, change your username. If you don’t actually understand how a free market works then you can hardly call yourself a fan.

      • Wasp is like Requiem for a Dream without the cheery bits says:

        As I mentioned to Coffee: you don’t have to understand something to be a fan.

        • Coffee says:

          I think you and Doubting Thomas have no idea what you’re talking about…maybe you should repeat high school economics…like FreeMarketFan and I did.

    • dolemite says:

      They are artificially limiting supply. So you’d be fine with all gas stations raising gas prices to $6 a gallon through collusion? Because that’s what this is…collusion to limit supply of a resource to drive up prices.

  8. McRib wants to know if you've been saved by the Holy Clown says:

    That might explain the sketchy events at a local diary here. Their entire herd was sent out of state to ‘graze’, and never returned. The family that owned the farm accused the manager of covering something up, secret money and lawsuits ensued, etc.

    I bet this was it.

    • AlteredBeast (blaming the OP one article at a time.) says:

      “Daddy, where did all our cows go?”

      “We sent them to a farm, out of state, so they have more room to graze.”

      “But we are a farm, why couldn’t they graze here?”

      “ಠ_ಠ“

  9. ZIMMER! says:

    Mooo…. not! I do not buy my milk from a conglomerate anyways. I go to a small family owned farm that free ranges their diary cows. Here: http://www.stillmandairy.com/
    Mmmmm the best milk anywhere. They do not pasteurize it to hell either. They still put it in glass bottles, and it is cheaper then the crap milk at the grocery store. MMMMMyumm!

    • bikeoid says:

      Yum Yum – unpasteurized Listeria tastes great!

      • elangomatt says:

        The person said it was pasteurized, but maybe it wasn’t pasteurized by the same method as big dairy farms. Milk can be pasteurized at lower temperatures for a longer period of time and still be perfectly safe, however this process is more expensive (since it is slower) but supposedly yields better tasting milk. I wouldn’t know though, because I have no idea how long the milk I drink has been pasteurized for though.

    • George4478 says:

      >>cheaper then the crap milk at the grocery store.

      Well, there’s your problem. Try the dairy milk.

    • bigkoiguy says:

      Let’s hope they stay in business.

    • Rena says:

      I make my own milk at home.

  10. Tim says:

    Seems pretty clear they did it. I guess it’s a matter of whether it counts as illegal price fixing. It’s basically a cartel action, so … not looking good for them.

  11. Cat says:

    I recommend the roast beef. It’s fresh and tasty.

    I hope you don’t want milk with that…

  12. AlteredBeast (blaming the OP one article at a time.) says:

    Wouldn’t this, in turn, impact the price of beef? And thus need more price fixing?

    • Loias supports harsher punishments against corporations says:

      I am very crious what they did with the dead cows.

    • Necoras says:

      From what I’ve heard from some of my farmer friends most cows breeds are either good for beef, or dairy, but rarely both. My guess is that this may have driven down the cost of dog food, but probably not steak prices. Pure speculation on my part of course.

    • eturowski says:

      Retired dairy cows are made into very cheap ground beef (usually of the fast food variety). “Dairy”-breed cattle are selected for things like milk yield and milk fat content.

      Yummy steaks and roasts are generally from “beef”-breed cattle which are selected for things like body weight and marbling.

      “Dual-purpose” breeds are kind of an average, “Jack of all trades, master of none” intermediate and aren’t nearly as common as the other two kinds.

  13. chemmy says:

    WHERE’S THE BEEF?

  14. RayanneGraff says:

    God this is horrible. I can’t believe animal life is valued so little. HUmans are so arrogant & ignorant.

    • Cat says:

      And hungry.

    • Oranges w/ Cheese says:

      You’ve seen how we raise the cows we actually EAT… right?

    • dolemite says:

      I’m sure you’ll catch flack for your opinion, but I concur. I’m a meat eater, but I don’t think just because our species has conquered the planet means you can treat all other life how we please. It’s really disgusting how little regard these mega corporations have for life. Just because we are going to eat the meat doesn’t mean you make the animals’ lives pure hell.

      It’s interesting that in any movie where aliens invade earth and enslave mankind, we are offended and disgusted that a species with superior intelligence and technology would treat us poorly. Umm…it’s exactly what we do to every other species living on the planet with us.

    • Awesome McAwesomeness says:

      Could not agree more. I am not a vegetarian, but eat mostly veggie (85%.) I am okay with meat to a certain extent, but am not okay with just killing the cows with no meat/dairy coming from the cow at all. That is completely arrogant and disgusting.

      • MrEvil says:

        Oh, I assure you that these cows went to the packing house, Holstein beef is just as good as Hereford or Angus. Feed yards all over the Texas Panhandle filled up with Holstein cows during the herd buyouts. Nobody was paying the feed yard to keep the animals fed only to be killed and left to rot in the pasture that’s for damn sure.

  15. Murph1908 says:

    OPEC would be proud.

  16. ponycyndi says:

    This pisses me off only because I had my first child in 2003. I remember that milk prices shot up alot around the time he started drinking cow milk. At that time, a gallon of milk was more than a gallon of gas! We were drinking 2 gallons a week by 2005.

  17. StarKillerX says:

    NY sets a minumum price and has a gouging law on the book which limits what stores can charge.

  18. failurate says:

    This explains the artificially low bologna prices.

  19. lehrdude says:

    Your Moooooove Dairy Farmers!

  20. MichaelRyanSD says:

    Meat is murder…..MMMmmmMMMmmm murder…..

  21. MichaelRyanSD says:

    Meat is murder…..MMMmmmMMMmmm murder…..

  22. dolemite says:

    Wow, took them this long to get on the ball with this? These practices have been known about for a long time.

  23. Rhinoguy says:

    Last time I checked small dairy farmers routinely sell off their dairy cows for slaughter when the price falls too low for milk to be profitable.

    • dolemite says:

      True, but you don’t usually have a conglomerate of larger producers enticing (or forcing?) them to do so.

  24. maxhobbs says:

    So, we have an abundance of meat the past several years, so why has the price of beef skyrocketed??

    • lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

      Exactly. I came here to say just this. If all those cows went to slaughter, why did beef go up too? I understand the need for a profit, but geez. It’s getting so that I’m aiming for deer on the way home from work.

      • failurate says:

        Meat, meat, every where, not a morsel to eat.

        Think pet food and processed meats like hot dogs. Not steaks or roasts. Dairy cows might make it into low quality hamburger.

    • Fred Garvin says:

      Because the steaks and ground beef you buy from the grocery store comes from the slaughter of young bulls, not from slaughtered dairy cows. The meat from slaughtered dairy cows probably goes into dog food and cat food.

  25. bigkoiguy says:

    Small agriculture is being choked to death in this country. Large corporations are writing the rules for government, which is only too eager to enforce them. Given regulations that require a milking parlor to be as clean as a commercial kitchen, rising energy and land prices, national animal identification tags, and other requirements, I’m not suprised that these farmers finally threw in the towel and took this private corporate “buyout”. Layers of regulations and promises from state officials that your inventory can be unilaterally declared “unsafe” and destroyed without any due process – something which is occuring throughout the nation at the moment – further increase the financial risk for cash-strapped farm families.

    For those interested in healthy food, I recommend the documentary “Farmageddon” which is being screened throughout the country. This movie details how small farmers left and right are being forced out of business through egregious examples of government overreach at local, state and federal levels. For example, one couple in Vermont – who broke absolutely no laws – had their documented-healthy sheep taken away by USDA at gunpoint due to concerns over a disease that was documented not to exist in sheep. [This case is also documented in the very good, eye-opening book "SHEEP The True Story Behind the USDA’s War on a Family Farm".]

    If you control the food supply, you can control people. We have to save our family farms or we will be indebted to Monsanto and other corporations.

    • Daniellethm says:

      The family farm is going the way of the dodo, and it’s so fucking sad. I grew up on a dairy farm so I met and helped raise my food, drank unpasteurized milk every day for 10 years, and I got to learn what a real hard days work was. I wish I could run my own farm, but it’s not really a viable career choice anymore.

      The dairy farm I grew up on was sold and demolished, the herd was probably slaughtered (Not something my father’s employer would share with a 14 year old). It was replaced by a cramped beef cattle farm, to keep overhead costs down, but it’s more like a mud pit than a farm anymore. My father now works on a different cattle ranch, where they raise grass fed black angus.

    • p. observer says:
    • p. observer says:

      I hope this doesn’t end up posted twice.

      Submitted without comment http://www.youtube.com/watch?v=l3893Yd_614

  26. nocturnaljames says:

    This reminds me of banks demolishing perfectly good houses to artificially drive up prices. Disgusting. This isn’t the road to prosperity, it’s the exact opposite.

  27. consumeristjohnny says:

    Dairy cows are not used for human beef consumption. Cows are “bred” for the flavor profile the factory farms desire, large growth and marbled fat. Dairy cows are there to be a milk machine.
    Think of it similar to a professional athlete and a weekend bowler. Both are humans, but you dont use them both for the same function.

    • bigkoiguy says:

      Dairy cows, after they stop giving sufficient milk, are usually butchered and ground into hamburger, typically for the fast food industry. They are indeed of lower quality for meat – which is why hamburger is the best use of them.

  28. samjung23 says:

    A lot of this happening in this country now. Now the crooks are trying to claim that peanuts have to go up in price. This is getting scary. Even some of the “free market fans” have to be concerned.

    • Talmonis says:

      Mos of them are not actual free market fans, but closet Fascists. Oligarchy is NOT a free market principle.

  29. Tiandli says:

    Increase profits by $9.5 billion and murder half a million cows. Settle lawsuits for about 10%.

    Suddenly, milk is upsetting my stomach and it’s not the lactose intolerance.

  30. Elgog Partynipple says:

    I don’t see what’s so wrong with this. Doesn’t the USDA pay farmers not to grow agricultual products to create artificial shortages and raise prices? This is a trade cooperative. By law they have an exclusive right to set prices and quatities to benefit their members. This would normally be illegal as a restraint of trade issue. But an industry cooperative can set target gaols for production as well as price goals for products. I don’t see this as being a successful litigation.

    This is not like the case against Dairy Farmers of America (Dairy Cooperative) and Hood Dairies (Producer) where together they were limiting outlets for non-members by purchasing all the bottleing plants in the area and dictating what price dairy farmers could sell their products for.