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New Class Action Suit On Milk Price-Fixing Filed In New Mexico

 |  April 12, 2022

New Mexico dairies and cooperatives are embroiled in a federal class action antitrust lawsuit accusing two dairy cooperatives of “artificially depressing” prices for at least seven years, causing many dairy farmers to experience severe financial distress and even bankruptcy as a result.

“Defendants’ illegal conspiracy has substantially restrained competition, forcing farmers to increasingly join DFA (Dairy Farmers of America) or Select Milk. In so doing, Defendants have depressed and fixed at artificially low prices the prices dairy farmers receive for the raw Grade A milk they produce,” states the antitrust complaint filed April 4 in the U.S. District Court of New Mexico.

Although the lawsuit is brought on behalf of all dairy producers in the Southwest, the named plaintiffs include Othart Farms of Veguita, Desertland Dairy of Vado, and three dairies in Mesquite: Del Oro Dairy, Bright Star Dairy and Sunset Dairy. Pareo Farm and Pareo Farm II of Veguita sold their assets and closed down in 2021.

Read More: America’s Dairy Farmers Are Hurting. A Giant Merger Could Make Things Worse

Three groups were named as defendants:Dairy Farmers of America Inc., the largest dairy cooperative in the United States with about 11,500 members nationwide and 252 in the southwestern U.S.; Select Milk Producers Inc. based in Artesia, New Mexico, with about 112 members according to its website; and the marketing entity Greater Southwest Agency, which includes Dairy Farmers and Select Milk as members. Other alleged “co-conspirators” are named in the suit as well.

Together, Dairy Farmers of America and Select Milk Producers control 85% to 90% of all milk sales in the southwest region, the lawsuit states. That region is defined as all of New Mexico, most of Texas, the eastern portion of Arizona, the Oklahoma panhandle and southwestern Kansas.

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