Members of the dairy industry have filed objection to a provision in Dean Foods' proposed settlement that would allow the dairy processor to determine, in its sole discretion, the competitive market price at which it will purchase up to 60 million pounds of milk per month from non-members of Dairy Farmers of America and Dairy Marketing Services for a period of 30 months. Dairy farmers say attorneys representing them are not looking out for their best interests.
In its filing, DFA and DMS cite concerns that the settlement creates both winners and losers in the class of dairy farmers, taking market access from one group of dairy farmers at the expense of another within the same class. The filing also describes how, if the settlement is approved, dairy farmers stand to incur financial damages by receiving a lower pay price for their milk.
DFA's filing recognizes the business rationale for Dean Foods to manage its ingredient costs. However, if approved, this settlement is likely to create a downward ripple effect on current pricing for milk purchases from DFA, DMS and other milk suppliers in the Northeast. In turn, other customers will make demands for price equality.