Funny Farms: Class Action Lawsuit Targets Dairy Industry, While DOJ Investigates Monsanto

To read a Web-exclusive story about how various partnerships can expose farmer-run co-ops to investigation, click here.

Conspiracies are the stuff of political thrillers, Internet manifestos and now--allegedly--the dairy industry. A group of Northeastern dairy farmers filed a class action lawsuit in October 2009 against Dean Foods and industry co-op Dairy Farmers of America (DFA), among others, alleging the parties have monopolized the purchase, processing and distribution of fluid milk in the region.

In 2001, Dean merged with Suiza, creating a dairy super power that in some states controls 90 percent of the market share for raw milk, according to a report released by Sen. Charles Schumer, D-N.Y., in August 2009.

The DOJ kept close watch throughout the merger, consenting to it with a few stipulations. Suiza contracted DFA as the sole milk supplier to its bottling plants. As one condition of the merger, the DOJ insisted the parties allow non-DFA farmers to supply milk to Dean. Second, the DOJ insisted Dean and Suiza divest 11 bottling plants to a third party that would compete against Dean.

The DOJ questioned the 2007 merger as well, noting it would make Monsanto the largest provider of genetically modified cottonseeds in the U.S. and allow it to dominate 95 percent of the market share in the Mid-South and Southeast. Ultimately, the merger proceeded on the condition that Monsanto divest certain assets and alter its third-party trait licensing policies.

Those trait-licensing practices form the core of Monsanto's current troubles. Monsanto didn't allow other companies to stack their traits with traits it engineered--say, creating a single seed that contains a proprietary trait for herbicide resistance while incorporating a competitor's growth trait.

Associate Editor

Lauren Williamson

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