Everyone who drinks milk watches the price carefully, but what most consumers don’t realize is that the price actually paid to dairy farmers for raw milk is currently the lowest it’s been in 40 years. That’s because only a few large companies control the country’s milk supply, and now the U.S. Department of Justice is investigating the situation and deciding whether to take anti-trust action against them.

Government regulators could stay out of it, but the situation has reached a crisis point where some farmers are losing money on every gallon of milk they sell. The U.S. milk market is dominated by Dairy Farmers of America (DFA), a massive farmers’ co-op that has acquired smaller co-ops nationwide. DFA supplies Dean Foods, which produces major brands such as Land O’Lakes, Garelick Farms, Mayfield, and Meadow Gold. There’s gold in those meadows, all right.

“Where there is a competitive market for buying milk, dairy farmers are paid more. When DFA comes to dominate a market, then farmers are paid less. Monopolists behave like monopolies,” Carstensen says.

Dairymen are not saying all their problems can be traced to the consolidation of their business. Farming is more complicated than that. Prices for animal feed, equipment and land have gone through the roof. And most significantly, today there’s a surplus of milk on the market, most agree, because of too many milk cows and a shrinking export market.

Now there are fewer family-owned dairy farms left, since it’s not a sustainable business, a situation only exacerbated by the recession. (For a bit of anecdata, the neighbors of my old family farm in northern New York are selling their farms to the Amish, or contracting to have electricity-generating windmills placed on their land to get by.)

Independent Farmers Feel Squeezed By Milk Cartel [NPR]

(Photo: Joe Shlabotnik)

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