LITTLE ROCK — Arkansas dairy farmers have until May 1 to agree to a $145 million settlement with cooperatives across the Southeast and Dean Foods of Dallas, the country’s largest processor of milk.
The settlement is part of an anti-trust dispute that dates to August 2007, when independent dairy producers from Virginia and Alabama claimed defendants conspired to monopolize the price paid for Grade A milk from independents in the Southeast.
The agreement with Southern Marketing Agency, which represents many coops in the region, and Dean Foods was made in July. Eligible farmers could see an estimated $13,000 payment, but they forfeit the right to sue the defendants on their own.
An estimated 7,000 farmers from Alabama, Arkansas, Mississippi, Louisiana, North Carolina, South Carolina and parts of Florida, Georgia, Indiana, Kentucky, Missouri, Tennessee, Virginia and West Virginia are eligible for participation in the settlement, according to court documents.
An unknown number of Arkansas’ producers will participate in the class-action settlement.
A fairness hearing to approve the settlement will be held May 15, in the U.S.
Dis-trict Court for the Eastern District of Tennessee, according to a special settlement website. A trial is set for July 10 for any defendants that have not settled by then.
Other defendants that are not part of the settlement include Dairy Farmers of America, which represents about 15,000 producers in 48 states, including most in Arkansas.
Defendants have denied any wrongdoing.
To be eligible, producers must have sold milk to a cooperative listed among the settlement parties. The settlement includes production from 2001 through the present.
In Arkansas, farmers selling their milk to the Arkansas Dairy Cooperative Association will be able to participate in the settlement since the association is affiliated with Southern Marketing Agency.The Damascus-based dairy association represents about 20 percent of the 108 licensed dairy farms.
At least one dairy farmer in the state said the settlement is not likely to change the dairy market conditions for producers here since there is little competition among commercial processors, who in turn purchase the milk from the cooperatives and turn it into a retail product.
“We’re at a point where there’s no competition,” said Mike Fisher, who manages a herd of 50 cows in Beebe. There is essentially one commercial end user of milk in Arkansas, he said, mentioning Coleman Dairy of Little Rock.Coleman is a division of Hiland Dairy Foods of Springfield, Mo.
As recently as 15 years ago, farmers could sell milk to more than one commercial processor in the state, Fisher said.
Prices paid to Arkansas producers are set with the help of the U.S. Department of Agriculture because the country’s dairy industry is a patchwork of unregulated and regulated milk-producing regions. The federal system guarantees a minimum price for independent producers. Farmers who are represented by a cooperative defer that pricing protection to the cooperative.
Tim Crawley, an independent dairy producer from Maysville in Northwest Arkansas, said he’ll settle.
“In the short term it [the payment] will pay the bills; in the long term, I don’t know if it will” make a difference, he said.
Arkansas farmers also get additional money through the $9.1 million Arkansas Dairy Stabilization Program, funding for which expires in June.
The case is Sweetwater Valley Farm Inc., et al. v. Dean Foods Co., et al., No. 2:07-CV-208 in the U.S. District Court for the Eastern District of Tennessee, Judge J. Ronnie Greer.
Business, Pages 21 on 04/17/2012