Schumer says disparities in milk price costing Chenango dairy producers $847,000 a month
WASHINGTON, DC – Consumers are paying just as much as ever for milk and dairy products, but our nation’s dairy farmers aren’t seeing as great a share of those consumer dollars as they once were, according to Senator Charles Schumer. The disparity, he says, is costing New York dairy farmers upward of $37.8 million a month.
In a conference call Thursday, the New York Democrat explained that while consumers continue to pay high prices in the grocery store, producers are only seeing 30 cents per dollar spent on dairy compared to the 48 cents per dollar they were receiving as of January 2008.
“Someone is raking in the profit,” the senator said, as he called for a federal investigation into the disparity which, according to his office, has decreased fluid milk revenues by $847,620 per month for Chenango County’s dairy farmers.
“I’m calling on the Federal Trade Commission and the Department of Justice to immediately investigate the disconnect between the rock bottom prices being foisted on dairy farmers and the still sticky price of milk at the store,” Schumer said.
Adding “insult to injury,” he reported, is the fact that our nation’s dairy farmers are struggling for survival while the country’s largest milk processor and distributor, Dean Foods, recently reported record earnings.
According to the senator, the conglomerate controls 40 percent of the U.S. dairy market as a whole and between 70 to 90 percent of the market in some areas of upstate New York.
Dean Foods operates more than 100 manufacturing facilities across the country and employees roughly 26,000 people. According to the company’s website, their fluid milk and dairy case products are sold under more than 35 local and regional brands including Garelick Farms, Meadow Gold, Tuscan Dairy, Friendship, Dean’s and Lehigh Valley. Their national brands include Land O’Lakes, Horizon Organic, Silk, International Delight and Rachel’s. They also sell a variety of products under the Morningstar label to retailers, restaurant chains and foodservice distributors.
In 2008, they recorded $12.5 billion in net sales and profits of more than $30 million. According to Schumer, they are on track to more than double those profits to $76.2 million in 2009.
If the DOJ and FTC do choose to turn their sights on Dean Foods, the company will not be the first dairy related business to face scrutiny. In December of 2008, Dairy Farmers of America and two of their former top executives were fined a total of $12 million by the U.S. Commodity Futures Trading Commission for attempting to manipulate the price of Class III milk futures on the Chicago Merchantile Exchange.
Two former executives of a DFA subsidiary company were also ordered to pay $150,000 in connection with the incident, for “aiding and abetting” the Kansas City-based dairy marketing cooperative in their actions.
In a conference call Thursday, the New York Democrat explained that while consumers continue to pay high prices in the grocery store, producers are only seeing 30 cents per dollar spent on dairy compared to the 48 cents per dollar they were receiving as of January 2008.
“Someone is raking in the profit,” the senator said, as he called for a federal investigation into the disparity which, according to his office, has decreased fluid milk revenues by $847,620 per month for Chenango County’s dairy farmers.
“I’m calling on the Federal Trade Commission and the Department of Justice to immediately investigate the disconnect between the rock bottom prices being foisted on dairy farmers and the still sticky price of milk at the store,” Schumer said.
Adding “insult to injury,” he reported, is the fact that our nation’s dairy farmers are struggling for survival while the country’s largest milk processor and distributor, Dean Foods, recently reported record earnings.
According to the senator, the conglomerate controls 40 percent of the U.S. dairy market as a whole and between 70 to 90 percent of the market in some areas of upstate New York.
Dean Foods operates more than 100 manufacturing facilities across the country and employees roughly 26,000 people. According to the company’s website, their fluid milk and dairy case products are sold under more than 35 local and regional brands including Garelick Farms, Meadow Gold, Tuscan Dairy, Friendship, Dean’s and Lehigh Valley. Their national brands include Land O’Lakes, Horizon Organic, Silk, International Delight and Rachel’s. They also sell a variety of products under the Morningstar label to retailers, restaurant chains and foodservice distributors.
In 2008, they recorded $12.5 billion in net sales and profits of more than $30 million. According to Schumer, they are on track to more than double those profits to $76.2 million in 2009.
If the DOJ and FTC do choose to turn their sights on Dean Foods, the company will not be the first dairy related business to face scrutiny. In December of 2008, Dairy Farmers of America and two of their former top executives were fined a total of $12 million by the U.S. Commodity Futures Trading Commission for attempting to manipulate the price of Class III milk futures on the Chicago Merchantile Exchange.
Two former executives of a DFA subsidiary company were also ordered to pay $150,000 in connection with the incident, for “aiding and abetting” the Kansas City-based dairy marketing cooperative in their actions.
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