Dairy herd "retirement" lawsuit settlement deadline is near

Wisconsin consumers have until Jan. 31 to claim their shares of a $52 million lawsuit settlement.

If you have purchased a milk product in Wisconsin since 2003, you are eligible to share in a $52 million settlement of a class-action lawsuit that accused milk cooperatives of conspiring to raise prices.

A consumer could get between $45 and $70, the lawsuit administrator estimates, though it could be a just few cents, too, depending on how many people apply at www.boughtmilk.com. People have through the end of the month to make a claim.

Attorneys will receive $17.3 million of the settlement.

The lawsuit, filed in September 2011, accused the National Milk Producers Federation through Cooperatives Working Together (CWT) of conspiring to kill cows to improve milk prices. From 2003 to 2010, members of the cooperatives representing about 70 percent of the country’s milk supply paid money into a fund that was used to buy out entire dairy farm herds that were sent to slaughter.

The voluntary “Herd Retirement Program” was offered 10 times, resulting in the slaughter of 506,921 cows and the removal of more than 9.67 billion pounds of raw milk from the market. The aim was to reduce the milk supply, raising prices, and was marketed with that message. Farmers were paid for their cows based on the cow’s average milk production.

According to CWT, 2,802 farms were accepted in the program from 2003 to 2010, with an average herd size of 181.

The milk producers and CWT denied they were doing anything illegal but settled the case last August, bringing the $52.2 million to consumers in 15 states. While the estimated number of eligible applicants is 73 million, as of Nov. 10 only 307,396 had applied, according to court documents.

Whether the plan to reduce the herd and raise prices worked is still being debated by dairy economists. Short term, prices may have risen, but a UW-Madison economist, Robert Cropp, who was an expert witness for the milk producers, said Wednesday that “farmers were sending their herds to slaughter in a voluntary program when milk prices were low, so the increase to consumers as far as that program was concerned was pretty minimal, almost no impact at all.”

However, analysis by another academic, professor Scott Brown of the University of Missouri, found that “the evidence is clear that this program has raised the price that all farmers have received since it first began removing cows at the end of 2003.”

Cropp, noting that the lawsuit was originally filed by an animal rights group (Compassion Over Killing) over the killing of healthy cows, called it “ridiculous to begin with,” with claims made by “people who clearly don’t know anything about the operation of a dairy farm.”

“The fact is, most of the farmers that participated in that program were planning to retire from farming anyway,” he said. “Very few farmers who entered this program ever came back into the business.”

Cropp added that dairy price supports, even herd buyouts, are nothing new in the industry, and this was a voluntary program.

“The impact was minor, ending up losing less than 1 percent of the milk supply, and the number of cows that went to slaughter included those, up to a third, that would have gone anyway,” he said.

To enter the program, a farmer agreed to sell the entire dairy herd for slaughter and agree not to produce, or allow the farm to be used in any way to produce milk.

Capital W: Plug in to Wisconsin politics

Subscribe to our Politics email!

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.