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Is it time to break up big ag?

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The New Yorker, August 2021

In the spring of 2020, Dairy Farmers of America, the nation’s largest dairy coöperative, purchased Dean Foods, the country’s largest milk processor, for four hundred and thirty-three million dollars. D.F.A. formed in 1998, out of a merger of four regional co-ops. Last year, its members, more than twelve thousand dairy farmers, sold fifty-six billion pounds of milk, about twenty-five per cent of the nation’s total, and the organization as a whole brought in nearly eighteen billion dollars in revenue. With the acquisition of Dean, D.F.A. gained unprecedented power as both a milk supplier and buyer. Pete Hardin, the editor and publisher of the dairy trade journal The Milkweed, told me, “It’s the poster child for agricultural concentration—and what Big Ag has become.”

For years, D.F.A. members and nonmembers alike have complained about the co-op’s growing market power. “The only reason I’m with D.F.A. is there’s no other place to go,” a dairy farmer from the Ozarks, who asked to remain anonymous, told me. “They have a ten-year exclusive contract with all the bottling plants within probably three hundred miles.” In other words, D.F.A. is the only available purchaser of his milk. An enterprise with a single buyer, called a monopsony, typically means lower prices for producers. He added that, when he started farming, in the early seventies, there were a dozen local plants that he could sell his milk to. “Over time, they kept getting squeezed out,” he said. “I’m set in steel now for ten years.”

Nationally, the four largest dairy co-ops now control more than fifty per cent of the market. They’ve been able to grow so big, in part, because of a 1922 law called the Capper-Volstead Act, which provides significant exemptions from antitrust laws for farmer-owned agricultural coöperatives. “The agricultural industry is different than other industries because Capper-Volstead allows them to combine in ways that other individuals would go to jail for,” Allee A. Ramadhan, a former Justice Department antitrust attorney who led an investigation into the dairy industry, told me.

Continue reading at The New Yorker.

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