DFA Idles Key Vermont Dairy Plant, Vermont Senate Delegation Introduces Legislation to Support Small Dairy FarmsDUPLICATE (Copy)
Photo by iStock/brandtbolding
The compounding forces of processor consolidation and unstable milk markets dealt another blow to Northeast dairy farmers and workers: the dominant cooperative Dairy Farmers of America (DFA) announced it will idle a major milk processing plant in St. Albans, Vermont, next month, just seven years after merging with the St. Albans cooperative. DFA says that it will keep picking up milk from all farms supplying the St. Albans plant and divert it to other DFA facilities.
Some 80 St. Albans workers will lose their jobs after striking to win a new collective bargaining agreement last year. The workers’ union, the International Brotherhood of Teamsters, says the shutdown appears to be retaliation for the strike and demonstrates DFA’s market power to shift milk processing out of northern Vermont without fear of competition. One analysis estimated that DFA controls over 80% of fluid milk processing in the Northeast; another found that DFA commands 60% of the regional raw milk market.
“This closure is not an isolated business decision. It is the result of a broader strategy by DFA to consolidate market share and power across the dairy industry,” said Jesse Case, director of the Teamsters food processing division, in a statement. “When one company gains that kind of control over processing, transportation, and supply, it can dictate terms throughout the industry. This leads to fewer independent alternatives for local farmers, less competition, and cuts to union jobs in dairy communities like St. Albans.”
The dairy industry is one of the few sectors of U.S. agriculture with a substantial number of small-scale producers, but that is rapidly changing. In just two decades, between 2004 and 2024, the U.S. lost 63% of its licensed dairy herds, meanwhile, milk production has only increased, as the industry shifts to fewer, larger farms. Americans drink less milk than they used to, contributing to a milk oversupply that drops prices below most farms’ break-even point. Between 2000 and 2021, the average U.S. dairy farm only turned a profit twice. To survive on lower prices, farms expand, milk production keeps going up, prices remain low, and small farms simply cannot make ends meet. According to the 2022 USDA Ag Census, the largest 3% of dairy farms with 2,500 cows or more produced 45% of all milk, up from 35% in 2017. Most of these large farms operate in the Western U.S. in states like California, Idaho, Texas, and Arizona, while average-sized farms in traditional dairy states across the Upper Midwest and Northeast face pressures to get big or get out.
Meanwhile, dairy processing is also consolidating, leaving farmers with fewer options to negotiate for fair prices or even get milk to market. In 1970 there were 3,749 dairy processing plants, by 2017, there were only 1,305. Over that same period, the number of dairy cooperatives shrunk more dramatically, from around 600 to 118. Most farmers rely on cooperatives to market their milk, as almost 85% of U.S. milk passes through a coop. DFA is the largest cooperative by far, handling over two-and-a-half times as much milk as its next largest coop competitor. DFA formed through a four-way merger and continues to acquire other coops and dairy businesses, including its former primary processing partner, Dean Foods. St. Albans coop creamery agreed to merge with DFA in 2019, after relying on DFA for marketing since 2003. Antitrust suits have accused DFA of monopolizing regional milk markets and colluding with processors, like Dean, to suppress prices paid to farmers.
DFA is particularly dominant in the Northeast, and in a recent local antitrust suit, Northeast dairy farmers alleged that DFA coerced farmers to join the coop by acquiring local processing and milk-hauling companies, securing exclusive supply contracts with independent processors, and then ending fee-based marketing services for non-member farmers. “These actions were directed at constraining, and have constrained, Northeast dairy farmers’ ability to get milk to market other than through DFA,” the complaint alleged. This case was later dismissed, but DFA has paid tens of millions to settle other antitrust allegations, including $50 million to Northeast dairy farmers for a suit brought in 2009.
Vermont dairy farms have been hit particularly hard by these trends. In addition to St. Albans, three other Vermont or New Hampshire dairy plants closed this year. In 2021, Danone, which owns Horizon Organic, canceled contracts for 89 organic dairy farmers in the Northeast, including Vermont, driving many out of business. Many Vermont farmers must now truck their milk across mountain roads to reach out of state processing powerhouses like New York, which increases hauling costs and eats into farmers’ dwindling earnings.
New legislation led by Vermont Senator Peter Welch and endorsed by Vermont’s senior Senator Bernie Sanders could break this cycle and ensure small to mid-sized dairies receive prices that reflect their costs of production. The Milk from Family Dairies Act would establish variable price floors for milk based on region and herd size to ensure farmers get a fair price. To address persistent oversupply, a national board with representatives from six regions would determine the total amount of milk that all U.S. farms can produce each year, giving each farm a yearly quota (called an “allowable milk marketing”) based on their historic production levels. Allowable milk marketings would be distributed by the board and could not be sold, leased, traded, or otherwise monetized.
The legislation also supports scaling down the largest dairies to halt consolidation; no single farm would be able to produce more than 1000% of the national average allowable milk marketings. After two years, the largest dairies will pay a penalty for selling more milk than 1000% of the national average. USDA will incentivize scaling down by buying back milk marketings from large dairies, providing premiums for large farms to sell cows to smaller farms, and assisting in loan restructuring. If the board determines that milk production must decrease, the largest farms will lose their milk marketing allocations first. If the board determines that milk production needs to increase, new farmers and small farms will have priority for new quota.
The bill also acknowledges the issue of processing consolidation and increases funding to invest in new dairy processing plants, storage, and other infrastructure.
“The Milk from Family Dairies Act offers a pathway out from under corporate consolidation and oversupply and toward a fairer future for all dairy farmers,” said Maddie Kempner, policy and organizing director at NOFA-VT, in a statement. Dozens of farm organizations support the legislation, including the Wisconsin Farmers Union and National Family Farm Coalition, both of which have led years-long efforts to reform federal dairy policy and halt dairy consolidation.
For more on this issue, listen to Claire Kelloway’s appearance on Vermont Public Radio.
What We’re Reading
The FTC settled its antitrust lawsuit against John Deere’s repair restrictions on the condition that Deere make its repair tools and software available to farmers and independent repair shops that want them. The director of PIRG’s Right to Repair campaign said, in a statement, that the FTC’s settlement is “much better than the deal secured in a similar class action lawsuit.” (Wired)
In other antitrust settlement news, the DOJ and a bipartisan group of state attorneys general concluded an investigation into the egg industry and alleged that egg executives coordinated to manipulate a key price index tied to most conventional contract egg prices, driving up egg prices during the 2022-2025 bird-flu outbreak. The DOJ and AGs’ investigation revealed damning internal communications that bolster previous allegations of egg greedflation. Egg corporations agreed to pay $3.3 million and donate 53 million eggs to food banks, a price that likely pales in comparison to profits amassed during the alleged conspiracy. (My latest in The Washington Monthly)
In an effort to further consolidate markets, reduce competition, and amass more shopper data, Kroger announced plans to acquire Giant Eagle, a regional grocery chain based in Western Pennsylvania, northern Ohio, West Virginia, and Maryland. (Newsweek)