Monday, June 28, 2010

Dean Foods Statement

(click on image to enlarge)

Dean Foods has submitted a statement to U.S. Department of Justice:

Dean is a fluid milk processor and when you consider how much milk goes into fluid Dean is admitting to a market share of about 50% nationally. Dean also claims to pay premiums over the regulated price. When DFA began its full supply agreement with Dean, premiums all but disappeared.

Dean states:

As Jerry Kozak, president and CEO of the National Milk Producers Federation,stated, “A worldwide decline in dairy demand, owing to the worst economic downturn in 75 years, is at the heart of the price crunch on the farm.” These global economic forces were exacerbated by an antiquated U.S. pricing system built in the 1930s that was not designed to deal with the complexity of modern global markets and therefore no longer serves the needs of U.S. dairy farmers.

Just above the Kozak quote is a misleading graph from another high paid "friend" of the American dairy farmer U.S. Dairy Export Council. The graph is misleading becuase it is based on "milk solids." Lactose and whey are very big dairy "milk solids" exports and that is not the same as milk.

Read the whole statement and draw your own conclusions.


  1. The lack of detail is extremely alarming. Real proof of innocence is achieved through well detailed case explaining the FACTS. Rhetoric is all we get because they continue to treat dairy farmers as the low educated class. Lets see some real evidence Dean without all the broad generalizations. Just blaming the economy doesn't work when dairy farmers are the only losers when the economy goes south. Its strange how Deans makes record profits in a down economy and the whole dairy sector including Deans doesn't feel or get the signal to cut back on supply in bad economic times.

  2. Something in there caught my eye. Dean's says there are about 58,000 farms, in Madison Vilsack said about 60,000. I've seen numbers that range from 62,000 down to 54,000 over the last few months. With all the sales that I've seen adds on I think we could have as few as 52,500 to as many as 63 or 64,000. Point is, DOES ANYBODY HAVE REAL NUMBERS? We guess at cow numbers, we guess at cold storage, we guess at production, we guess at price, we guess that cheese actually sells at CME, we guess there is a surplus, we guess at slaughter numbers. When I was in college we were taught that to be an effective manager you had to work with hard numbers not guesses. Of course, that would explain why the dairy industry is in the shape its in. We base this months guess on last months guess, then revise the previous guess, basically nobody has a clue. John, is there a way to come up with real, actual numbers or is the info so fragmented and scattered that it can't be pulled together? Next question, is it done this way on purpose or just the system was never properly developed? DWCovert

  3. If you go to:

    Then go down to "Quick Stats"

    Click on "Dairy"

    The next page gives you the choice of "Operations"

    For 2009, NASS says there are 65,000 - who knows.

    Each farm that goes out means each remaining farm has less political power.

  4. The number of licensed dairy herds in the United States in 2009 was 54,942. The number of licensed dairy herds in the United States in 2008 was 57,127. These data are from the February Milk Production release (USDA/NASS).

  5. So Vilsack, the guy supposedly in charge, doesn't even have or acknowledge,the'official' number from his own department? So how can we out here in the real world trust any number being tossed around? Worst part is these are the numbers that get used by everyone from academia to traders on the CME to form opinions on policy and make decisions that affect farmers on a daily basis. Unbelievable.