Dairy Farmers of America, the 20-year-old product of the largest merger in dairy cooperative history, has become a vertically integrated “corporation” that enjoys the legal benefits of a cooperative while increasingly serving its own bottom line rather than its member farmers, says Washington Monthly.
“The distance DFA has traveled from a traditional dairy co-op is breathtaking,” writes Leah Douglas, a FERN contributor. “The co-op reported a net income of nearly $132 million in 2016; meanwhile, the number of dairy farmers in the U.S. continued to plummet, hitting a new low of 58,000. Historically, the role of a dairy co-op was to engage in collective bargaining with the typically much larger corporations that process and market milk and milk products. This was, and remains, crucial to farmers’ receiving a fair price.”
“You can’t look at DFA as anything now but a corporation,” Nate Wilson, a longtime journalist for the Milkweed, a publication that covers the dairy industry, told Douglas. “The management of DFA is consistently working against the rank-and-file members.”
Throughout the 20th century, co-ops protected dairy farmers and sustained healthy competition by giving those farmers the power to bargain effectively with big agribusinesses. “Today, however, DFA has upset that balance by joining forces with the parties on the other side of the negotiating table,” writes Douglas. “The organization says it represents more than 13,000 member farmers in 48 states. But it simultaneously has grown to the point that it owns or controls entities up and down the entire dairy industry supply chain, from milk truckers to food processors to marketers. It’s an obvious conflict of interest: the less these entities have to pay DFA farmers for their milk, the more money they — and DFA — make. According to its 2016 financial statement, 60 percent of DFA’s net income that year came from ‘non-member business earnings,’ none of which was shared with members.”