Way Back When Dairy is being forced out of the Houston market!

Dairy cowUpdate, December 11, 2013: DFA joins $158.6M milk price fixing settlement “Dairy Farmers of America Inc. and related companies have agreed to pay $158.6 million to settle claims that they fixed the price of milk.
If approved, the settlement would end an antitrust lawsuit filed in 2007 against the Kansas City-based cooperative by Southeast dairy farmers. A trial in the case was set to begin Tuesday in federal court in Tennessee.”

I just learned some devastating news for Houston Real Foodists! The HoustonPress is reporting that Way Back When Dairy has been told by the Dairy Farmers of America (DFA) that it must “market 100 percent of their milk production through the Cooperative, with the exception of milk for home consumption.”  It looks like Way Back When will be forced to stop selling their milk to retailers and customers in the Houston area.  Let’s look at what’s behind this dilemma:

Just what is the DFA?

The Dairy Farmers of America is a cooperative, but it is not your local dairy farmers getting together and selling their milk.  The DFA is BIG DAIRY all the way.  The DFA includes almost 15,000 members in 48 states and has more than 4,000 employees.  It buys the raw milk from its members and sells the milk and milk products to wholesalers. DFA’s 2010 net sales were $9.8 billion, and it controls about 33% percent of the raw milk production in the US (and the percentage may be understated).  Their control is “achieved by coercion … denial of other market opportunities.” It’s important to mention here that the DFA’s control of raw milk is much higher than 33% in some areas, such as the Southeastern US, where it controls almost all of the milk.  Among better known DFA brands are Borden® Cheese, Cache Valley® Cheese, Keller’s® Creamery Butter, Plugrá® Butter, Breakstone’s® Butter, Kemps® and Guida’s Dairy.

Alliance between Dean Foods and the Dairy Farmers of America

To make matters even worse for dairy farmers, Dean Foods, a milk processor, and the DFA are allied in a complex system of marketing processes and anti-competitive agreements that ensure high profits for themselves and almost ruinous conditions to the dairy farmers. “Dean Foods controls about 35% of all fluid milk processed in the U.S.” In some parts of the country the control is as high as 80% to 90%.  Dean brands include Horizon®, Land O’Lakes®, Silk®, Oak Farms®, Alta Dena®, Meadow Gold®, Pet®, Hygeia®, as well as Dean’s®.

“Thus, in tandem, the nation’s biggest fluid milk processor [Dean Foods] now receives its raw milk supply from a subsidiary of the nation’s largest milk co-op [DFA]—trapping thousands of dairy farmers in DFA’s precarious financial system. And DFA owns half-interest in NDH [National Dairy Holdings]—currently the nation’s second largest fluid processor. Serious questions arise about DFA’s independence, relative to the interests of the processors it supplies with milk … and in the case of NDH, half-owns.”

The DFA’s ultimatum

I like the way the HoustonPress article characterizes the DFA ultimatum:

Why does DFA want so badly to make sure that dairy farmers sell all of their production to them? By making sure the farmers have no other customers, the DFA has the freedom to set prices to whatever they see fit, in this case, $1.62 a gallon. [Emphasis mine]

Way Back When Dairy, located in Jacksonville, TX, has been selling farm-fresh low temperature pasteurized, unhomogenized milk to many local Houston restaurants, coffee shops, and markets. Here are just a few of them: Revival Market, Underbelly, Greenway Coffee & Tea, Fat Cat Creamery, Southside Espresso, Pearland Coffee Roasters, and Sycamore Grounds.  Low-temp pasteurized, unhomogenized milk is the absolute best milk Texans can buy in retail stores, and it is far better than the conventional, highly processed milk and milk products normally bought in stores.  Way Back When Dairy also sells certified raw milk to Houston customers who want fresh, completely unprocessed milk [the best way to drink milk].  Their raw milk price is the best in town at $5.00 a a gallon. (That price tells the story–the DFA only offers its members $1.62 a gallon.) Now it looks like all, not just part, of Way Back When Dairy milk will be turned into highly processed, nutrient-damaged milk and milk products.  What a shame!

According to HoustonPress the only way Way Back When Dairy can continue to supply the Houston market is to find a new customer, or customers, that can buy 2,500 gallons of milk per week. Due to the almost complete control the DFA has over the raw milk market, it is probably difficult for Way Back When to find another buyer for its milk. You can contact/like the dairy on their Facebook page and you can follow them on Twitter.  You can also spread the word about this through your Facebook pages, Twitter, and any other social media you use.

Footnote about legal action against the DFA

“A group of Northeast dairy farmers has filed a lawsuit against Kansas City-based Dairy Farmers of America and Dallas-based Dean Foods Co., charging they fixed prices and monopolized the fluid milk distribution market. , , ,The dairy farmers charge that DFA, the nation’s largest cooperative, and Dean, the nation’s largest processor, have lowered the price the farmers receive for fluid milk by making DFA and its affiliates the exclusive suppliers of milk to Dean and Hood. The two processors bottle about 90 percent of the fluid milk in the Northeast, which encompasses 11 states and the District of Columbia.” [emphasis mine]   The farmers have been forced to join the organizations to get access to bottling plants. Apparently, there has been no relief to date for the farmers, since the DFA is still issuing ultimatums to its members.

Sources

HoustonPress,Sorry, Houston, No Farm-Fresh Milk for You
Wikipedia, Dairy Farmers of America
NPR, Independent Farmers Feel Squeezed By Milk Cartel
Dairy farmers sue DFA/Dean Foods
Peter L. Hardin, editor/publisher of The Milkweed, Dairy Farmers of America & Dean Foods (#1 U.S. Farm Milk Marketer + @1 U.S. Milk Processor) Dairy’s Anti-competitive Duo

This post is shared on Monday Mania 9/10/2012, Real Food Wednesday 9/12/2012, and Freaky Friday 9/14/12.

This entry was posted in Access to Good Food, Access to Real Food, Food Freedom, Food Rights, Health, Nutrition, Raw Milk, Real Food and tagged , , , , , , , . Bookmark the permalink.

12 Responses to Way Back When Dairy is being forced out of the Houston market!

  1. Vanessa Man says:

    About 8 years ago they did the same to another company that used to sell at the farmer’s market in Katy. DFA and their equals only ca about money, they don’t care about offering us customers the best product. It is a shame that good products don’t come to the city because of greed. Very disappointed that I won’t be able to buy your products any more.

  2. martin says:

    maybe he should cut back his milk production charge $10 a gallon and produce only what he sell to his customers and tell dfa to f off

  3. Mark Robinson says:

    Why not call DFA’s bluff? Find customers who will take the 2500 gallons coming from the dairy, and sell everything direct?

  4. Doug says:

    He could cut back on production but he still has to feed the cows and feed is expensive.
    I’d say go out and get more stores to buy his product. Small farms need to pull together now days to make it work and yes fight the big business. Make a effort to go where ever you need to, to buy his products. Just don’t rool over people.

  5. Jamie says:

    I would love to buy your product. Maybe we could have an event or 2 of some kind to rally everyone to bring new customers on board. How many more customers buying locally at 5 dollars a gallon would it take?

  6. DeOnna Ganske says:

    The overwhelming response to the news that we announced last week has literally brought me to tears. My family has worked very hard at building out custer base. This is not an operation that is an adult only kind of thing. Our 13 yr old daughter did not have the typical summer of a teenage girl. She worked right along side Mark and she worked the Urban Harvest Farmers Market EVERY Saturday morning. The people who came to the market as customers and other vendors were more like family and friends to us. The little kid that came to our booth for a chocolate milk and paid with its change was a payment in itself. In all actuality, I think we gave away more chocolate milk than we sold because every kid that came by with a family or by themselves got a chocolate milk for free. Mark has a soft spot for kids and just loves to see them smile. No matter what happens with this situation we want everyone to know how much you ALL mean to us.

  7. Jen says:

    That is so appalling. I have no words. I hope that this WBWD will be able to find that 2500 people needed. And yes, DFA is a monopoly that needs to be put in check. I am happy that the newspaper at least picked up on the story and is on the side of the dairy.

  8. It is so sad that individual farmers don’t have the right to sell their goods when people want to buy them. I’m glad the newspaper wrote about this story. I can’t imagine if my dairy farm had to go through this. I’m so sorry to for the Way Back When Dairy farm. I hope that it works out for them.

  9. Pingback: Newsworthy | The Appropriate Omnivore

  10. Larry Moore says:

    Our Family can’t drink but about 2 gallons a week, but I promise we will buy 2 gallons every week. Hang in there Way Back When Dairy-We love your products and feel like you are Family–May GOD prosper you

  11. Suzanna Chiriboga says:

    I’m heartbroken. May God deliver all of us from this trial. We need good sourced products from the land God gave us – not corporations.

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