Government and Big Business Squeezing the Little Guy

We believe the primary purpose of this rule is more profit for "Corporate America " by eliminating competition and charging the American consumer and retailer a higher price for their milk. Here's why:

Kroger is a company with $56.4 billion in sales that is the 2nd largest food retailer in the United States. Kroger told USDA that they "have been forced to respond to competitive situations with producer-handlers" and they could not do this "without eroding their profit margins."

Dairy Farmers of Amercia (DFA) is the nations’ largest milk cooperative. In 2003, DFA marketed 56.5 billion pounds of milk – a third of the nation’s 170.3 billion pounds of milk production. As an $8.49 billion dollar milk cooperative, they testified that producer-handlers were able to sell their milk at too low of a price. DFA's answer is to raise the cost for producer-handlers to do business. 

Dean Foods, the largest dairy foods company in the country testified that these regulations were needed to raise the cost for producer-handlers to do business. Dean Foods sold over $11 billion dollars of products and reported profits of over $200 million last year.  Deans just posted higher than expected earnings for the first quarter of 2005.

Dean Foods and DFA are bound by a national milk supply agreement, which provides for payment by Dean of liquidated damages up to $96 million in the event of a breach, and was sweetened by a lump sum payment by Dean to DFA of $28.5 million in the 4th quarter of 2001.

DFA's solicitation of the Secretary's help in eliminating producer-handlers as a competitor in the Pacific Northwest and Arizona is the same strategy DFA has employed in other marketing areas encompassing the Appalachian, Mideast, and Southeast regions of the nation.

The End of Free Enterprise?

Aside from raising consumer prices, this decision places at risk four family-owned dairy operations. The government's decision threatens the life work of our families by taxing us millions of dollars and giving that money to our competitors. In our America, the government promotes entrepreneurs; it doesn't crush them.

You can make a difference!

Take action, Save Family Dairy Farms and Voice your opinion to the USDA!