Vt. Senator Calls for Dairy Processor Probe (Lancaster Farming)

By Tracy Sutton
Zone Editor

WASHINGTON — Bernie Sanders, the independent Vermont senator known as a pitbull on the pantleg of corporate America — the same senator who gained a measure of renown for demanding congressional hearings on corporate bailout bonuses — this week put dairy processors in his crosshairs.

In a sober teleconference Wednesday, Sanders, whose constituency comprises many New England dairy farms, called the current dairy crisis “a real disaster.”

“This is the worst crisis I can remember,” said Sanders. “We are losing family farms. And when we lose farms, we don’t just lose farmers. This has a huge impact on the local economy.”

This week Sanders, along with Vermont Agriculture Secretary Roger Allbee, and Jenny Nelson, a dairy farmer on Sander’s staff, met with Agriculture Secretary Tom Vilsack about increasing price supports paid to dairy farmers.

“I think (Vilsack) is sincere in trying to address the problem,” said Sanders. But finding funding for embattled dairy farmers, during a recession, is “tough stuff” politically. “Farmers are a small part of our population and getting smaller all the time.”

Sanders outlined a number of proposals including a congressional effort to increase MILC (Milk Income Loss Contract) payments, but recognized that such payments are a “short-term” fix. “We need to work with regional coalitions” to bring about dairy product price supports — “Pennsylvania is suffering. New York is suffering.” Sanders said that while the crisis was being felt most keenly in the Northeast, dairy farmers across the country were struggling.

Jenny Nelson, a Sander staffer and Vermont dairy farmer, said farmers there are losing roughly “$100 per cow, per month.” There is a feeling of “total despair” and with cattle prices devalued, “no way out” of a bad situation. Every month, said Nelson, farmers are eating away at the equity in their businesses. The mounting debts have overwhelmed many.

A Monopoly?

But the “interesting situation” in this crisis, said Sanders, is the record profits of milk processors, who — in the case of Dean Foods, Inc. (an affiliate of the Dairy Farmers of America) — control 70 percent of market share nationwide. “It’s near total market share in some regions,” said Sanders. “In Michigan, it is 90 percent” market share.

Dean Foods profits grew from $30 million in the first quarter of 2008 to $76.2 million for the first quarter of 2009, according to figures provided by Sanders’ office — that is a 147 percent increase.

Meanwhile farmers have seen the price for their milk drop from $19.50 per hundred pounds a year ago to less than $11 in June.

“I don’t think it takes Sherlock Holmes to make a connection,” said Sanders.

In response, Sanders has asked the Department of Justice’s antitrust division to investigate whether processors, such as Dean Foods Inc., are enriching themselves at the expense of dairy farmers.

Sanders met last week with Assistant Attorney General Christine Varney, head of the Justice Department’s antitrust division, and said he “felt satisfied that there will be progress” on an investigation.

Lancaster Farming asked Sanders about his reaction to the previous Justice Department two-year investigation into Dairy Farmers of America cooperative, which resulted in a $12 million fine for dairy market manipulation and an unnamed monitor. Did he think the fine was proportionate given the crisis facing dairy farmers?

“No. The fine is not significant. They will think this is the cost of doing business and will absorb that cost. You have to fine them enough so that they end that practice.”

“The bottom line is that we have an obligation to enforce the law.” The federal government, said Sanders, is not in the business of setting prices, however, “the law states we must not have monopolies. We need a competitive process.”

Which, in Sanders opinion, does not exist right now.

“Farmers are getting ripped off and forced to sell for less.”

To get reform, Sanders said will be a “hard fight,” but stated that “From a food security point of view, it is imperative that we have a decentralized food system and small family farms.”

If those farms go under, he predicted a situation in which farming grows more corporate and centralized and monopolies will be even harder to break.

“We need to rethink this. We are losing family farms. The American people are not going to be happy about that.”