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Tue Aug 2, 2022, 09:34 PM

Lawsuit accuses Dairy Farmers of America of creating 'monopsony' in the Northeast

New York state dairy farm is leading a class-action lawsuit in federal court in Vermont against Dairy Farmers of America — the country’s largest dairy cooperative — arguing the organization has violated antitrust law and artificially lowered the price of raw milk.

The lawsuit, filed July 29, claims Dairy Farmers of America has created a “monopsony,” which is defined as a market in which many sellers have only a single buyer, across the dairy industry in Vermont and 10 other states in the northeastern U.S.

At issue, it says, is an “inherent conflict of interest” between two related segments of the cooperative’s business.

Dairy Farmers of America is tasked with ensuring its members get the highest possible price for their milk, per the lawsuit. But farmers must sell their milk to processors, who use it to make other products, to make money. And the defendant argues that Dairy Farmers of America's milk processing operations benefit from lower milk prices.

As a result, S.R.J.F., Inc. of Stamford, New York — the lead defendant — alleges it, and the more than 3,000 other milk producers in the cooperative’s Northeast region, operate in a highly consolidated market that has led them to make less money than they otherwise would with greater market competition.

Read more: https://vtdigger.org/2022/08/02/lawsuit-accuses-dairy-farmers-of-america-of-creating-monopsony-in-the-northeast/

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