Friday, January 21, 2011

DFA's Opposition to Dean Food Settlement

DFA's press releases on the proposed settlement of the NE case are everywhere (to coin a phrase - none dare call it journalism).

Career board member of DFA/DMS Ed Shoen states in a court document:

When Dean uses this provision to say that the “competitive market price” for
the milk it buys under Section 9.2 is lower than what DMS had been charging, then I’m sure Dean will then want DMS to cut the price on the rest of the milk DMS is selling to Dean so that it too is sold at that lower “competitive market price” that Dean has announced. We’ll end up getting less for all of our milk sales to Dean, and we’ll be selling them less volume, but we’ll still
have the responsibility and cost of balancing their needs at the plants we serve. Under our current arrangements with Dean, one of the services we provide is “balancing” the plants’ needs no matter how supply and demand conditions change over the course of the year. It could be plus or minus 20-30 loads per plant from one day to another. That’s a valuable service and one that costs money to provide, whether it’s disposing of surplus milk or paying for additional milk when milk is short. When we lose this volume, I expect we’ll face the same balancing costs for Dean, but we’ll have less milk to recover those costs. The other possibility is for Dean to do its
own balancing which adds cost on their end for the “independent milk” they have just incurred. It might well have been less harmful to us if the Proposed Settlement gave away all of the volume at one plant, and at least saved us the balancing costs there.

There is no doubt that DFA rules the roost in FMMO I and Dean Foods is the major Class I user. So, if you go to:

"Announced Cooperative Class I Price for Selected Cities"

You will find the price for FMMO I is 59% of the average and less than half of nearby orders.

Con games always sound so logical.


  1. Oh my looks like a shell game, the part Mr. Career director forgot to mention is DMS should have the market power to charge a handling fee on the lost pounds if they are the balancer. I doubt dean ever payed no premium just less then the compition, this is the model it was built on. Wally World was the ultimate herd bull dean was in the head lock, the bull took what he wished to. The poor farmer was on the ultimate bottom, the farmers called 911 repeatedly the law didn't come. USDA, DOJ will ultimately be to blame they served political interest not public interest. How sad!! Now farmers sue farmers, lawyers win! Justice could be obsolete, consumers and citizens will suffer!

  2. farmer don't sue farmers! Farmer sue organizations that eliminated competion, force farmers into DMS and other agencies and syphon millions upon millions of farmer dollars to individuals and companies for no other reason but the fact that they can and nobody questions it. When are we going to start questioning our employees about "where's the money"? When will some of these individuals go to prison? Where do they hide all of the money?