A group of U.S. consumers has sued 14 dairy marketing cooperatives, alleging that an industry program designed to boost exports restricted domestic milk supplies and pushed prices for staples including milk, cheese and butter above competitive levels.
The proposed class action was filed in federal court in Virginia and targets cooperatives participating in Cooperatives Working Together, or CWT, which has been rebranded as the NEXT Program. The farmer-funded initiative is operated by the National Milk Producers Federation, according to Courthouse News Service.
The plaintiffs contend that the participating dairy producers collectively account for about 70% of U.S. production and have used the export program to divert dairy products — and the raw milk needed to make them — away from the domestic market, according to Courthouse News. The lawsuit alleges that the resulting reduction in supply allowed prices in the U.S. to rise.
Under the program, participating cooperatives make voluntary contributions that help subsidize exports of products including butter, cheese, milk powders, cream and milk protein concentrate. The consumers allege that converting raw milk into products destined for overseas buyers leaves less milk available for domestic production, thereby affecting prices paid by U.S. purchasers, Courthouse News reported.
The lawsuit characterizes CWT as a cartel and alleges that its activities have been intended to influence prices across U.S. dairy markets. Those assertions are allegations and have not been established by a court.
The National Milk Producers Federation has presented the export initiative differently, describing it as a tool for expanding overseas demand and helping U.S. dairy cooperatives remain competitive internationally. Federation President Gregg Doud has said the program has strengthened foreign demand for American dairy products, according to a statement cited by Courthouse News.
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The federation said in a 2026 announcement that the NEXT Program had supported exports equivalent to 74 million pounds of butter and 127 million pounds of cheese, Courthouse News reported. The plaintiffs cite the scale of those exports as evidence that the program can materially affect the amount of dairy supply remaining in the U.S. market.
The complaint also argues that the economics of the arrangement depend on cooperation among producers. It cites an earlier CWT communication saying the program added 43 cents per hundredweight to the amount received by dairy farmers in 2012, according to Courthouse News.
The latest case follows earlier antitrust litigation involving the dairy industry and CWT. The plaintiffs say the program has paid more than $270 million to resolve antitrust cases during the past decade, Courthouse News reported.
Among those earlier disputes was litigation over a CWT herd-retirement initiative, under which participating farmers reduced dairy herds as a means of limiting milk production. The National Milk Producers Federation, Agri-Mark Inc. and other defendants agreed in 2020 to pay $220 million to settle a class action stemming from the program, while admitting no wrongdoing, according to Courthouse News. The conduct at issue in that case ran from 2003 through 2010.
The new lawsuit also points to concentration in the U.S. dairy business. Dairy Farmers of America, one of the defendants, accounts for close to one-third of the nation’s fluid milk production, according to the Courthouse News report. The consumers argue that high costs for processing facilities, transportation, cattle raising and marketing make it difficult for new competitors to enter the industry.
The plaintiffs contend that any increase in wholesale dairy prices ultimately reaches shoppers because milk, cheese and butter are widely purchased household goods with limited substitutes within their respective categories.
They are seeking damages and an injunction under the federal Sherman Act as well as state antitrust and consumer-protection laws and claims for unjust enrichment, according to Courthouse News. The case was filed in the U.S. District Court for the Eastern District of Virginia.
Source: Courthouse News
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