November 30, 2021
Dairy is big business. And while the workers and small-scale dairy farmers are getting squeezed out, those at the top are reaping the benefits and getting even richer. Farmers originally organized cooperatives to build power and market share. But one of those cooperatives, Dairy Farmers of America, has gotten so big and powerful, there are questions about whose interests they are serving.
In this episode, we unpack the growing corporate consolidation in the dairy industry and rise of farmer cooperative Dairy Farmers of America. Claire Kelloway of Open Markets Institute breaks down what the push to “get big or get out” means for farmers, workers, and consumers–and some ways to challenge that growing corporate power.
Topics covered include:
- Bad cafeteria food is a norm that’s hard to escape–and that’s because the system is rigged that way.
- How the dairy industry is changing with more cows packed onto fewer farms, and driving a crisis of low prices and overproduction.
- The role of farmer cooperatives in supporting farmers’ livelihoods – and how those structures can go wrong.
- The rise of Dairy Farmers of America (DFA)–and why this powerful mega-cooperative has been sued by the very farmers who own it.
- How Fair Trade USA’s “fair trade dairy” label is putting its seal of approval on some of the root causes of “Unfair Dairy.”
- The era of the “Robber Barons” and what that has in common with today’s industrial food system.
- Anti-trust law, and how it can be a powerful tool to support building a fair food system for farmers, workers, and all of us who eat.
Do you work on a farm participating in the “Fair Trade Dairy” program? We want to hear your perspective. Send a message to [email protected] or call (800) 631-9980.
Claire Kelloway’s reporting on cafeteria contractors and how that system is rigged in favor of big food companies: https://www.foodandpower.net/latest/2020/05/20/report-exposes-system-of-big-food-kickbacks-to-cafeteria-contractors-cutting-out-local-producers.
Article by Leah Douglas covering Dairy Farmers of America: https://thecounter.org/how-rural-america-got-milked/
Learn more about the potential of cooperatives as a tool for farmers to transform their livelihoods and build alternative economic structures from Andres Gonzales of Manduvira Cooperative in Season One of For a Better World: https://fairworldproject.org/podcast/season-1/episode-2/.
More of Claire Kelloway’s writing on Dairy Farmers of America: https://washingtonmonthly.com/2020/09/14/milking-profits-the-dairy-monopolies-that-are-hurting-farmers/
Claire Kelloway and Open Markets Institute piece on how anti-monopoly and anti-trust rules can support worker organizing and a more democratic economy: https://lpeproject.org/blog/antimonopoly-is-about-democratizing-the-food-system-and-the-rest-of-the-economy/
Open Markets Institute report on “Redeeming the Democratic Promise of Agricultural Cooperatives” https://www.openmarketsinstitute.org/publications/redeeming-the-democratic-promise-of-agricultural-cooperatives
All season long, we’ve been talking about the major contrasts between the image the dairy industry paints of itself and the reality behind all that pastoral marketing.
Those pictures of red barns and black and white cows, versus terrible working conditions, work accidents, and low pay. When you hear the words Dairy Farmers of America, what comes to mind? If you said salt-of-the-earth types and rolling pastures, I probably would have been with you. But what about private jets?
I’m your host, Dana Geffner, Executive Director of Fair World Project. And this episode, we’re going to talk about that rural vision of red barns, and how it’s packaged up to sell.
The dairy business isn’t just small farms, like the one that Jim Goodman talked about with Ryan, our Political Director, in Episode 4.
Dairy is also BIG business. And while small-scale farmers and workers are getting squeezed, those at the top are reaping the benefits, making good money – and riding in private jets. In this episode, Fair World Project’s campaign manager Anna Canning talks to Claire Kelloway of Open Markets Institute about ALL the money, and power, and influence that’s at stake in the dairy industry.
Hey, it’s Anna. I’m back. And in this episode – well, before we get started I’m going to warn you. The best analogy I’ve got is probably gonna date me. But you know Ms Frizzle and the Magic Schoolbus? Well, every story starts off kind of normally, a regular school bus driving down the road, and then 3, 2, 1 blastoff! They’re on a whirlwind into another world like an unseen part of the solar system or the inner workings of the human body. Something that powers the things we see everyday, but isn’t so clearly visible. Well, this episode is that blastoff moment.
So far, we’ve heard from farmworker organizers and farmers. And often, the story stops at this: farmers needing more money for their milk and workers needing better wages and protections. Stuck at an impasse.
Well today, we’re taking a trip right into the makings of that impasse: the rigged system that’s hurting farmers, workers – and, really, all of us who want good food and a habitable planet.
My guest today is
Claire Kelloway. I am a reporter and researcher at the Open Markets Institute, which is a think tank that covers anti-monopoly policy.
Anti-monopoly policies keep powerful companies in check – they’re the rules that aim to keep markets functioning in a way that’s fair, instead of letting big companies bully smaller players out.
But Claire didn’t start out working on policy. Instead, she was working for one of the big companies that supply food to college campuses.
And I felt like this corporation had dedicated leadership, really believed that business was the way to change the food system and also served an elite clientele. So they had the resources and the money to invest in the right things. And, you know, even though they were doing their best, I kept seeing how the market structures and the policies and the rules of the game really shaped what was available, shaped the way they did business.
Bad food at college cafeterias is a cliché. But that’s not an accident. Since she left her job working for a cafeteria contractor, Claire has done some reporting that uncovers just why it is that bad food is the norm in college cafeterias. The reality is that at every step, the system is rigged to favor the big national and multinational food companies. And even if there’s someone in that system with good intentions, wanting to buy local food, or more fair or humane food, the existing rules make it so that the producers they’d want to work with are too often locked out of the system.
Last episode, Ryan talked to Jim Goodman about his experience as a small-scale dairy farmer. And over time, he’d observed the market change. Before, there were multiple milk buyers who came to his barn. And then there was only one. And every year, more farmers like him have fewer options. And on the other side, say that someone like Claire wanted to buy that small-scale farmers’ milk for their institution? The infrastructure to get to Jim’s milk straight to those markets is vanishingly rare.
Claire moved on from the cafeteria industry. But she kept tracing this theme of money and power all through the food system. And what Jim saw on his one farm in Wisconsin has been happening all across the country.
So the dairy industry has seen a lot of consolidation on the farm production level over the past couple of decades.
And that’s primarily a huge loss in the smallest farms and a concentration of production on to larger, more industrial farms, often farms that are increasingly in the Southwest and water scarce areas, places where it’s like, why are we raising cows here? How is this better for the environment than the current system or the previous systems?
These mega-dairies that Claire is talking about are huge. In episode 4, Jim talked about how his farm had 40 cows. That was the number he could care for with just his family doing the work. But these farms in Western states like Texas, California, Idaho, they’re milking 10,000 cows.
Even though there are less than half as many dairy farms today as there were 10 years ago, the average farm is twice as large and milk production is actually going up.
Fewer farms, but more cows packed onto them. And more milk. Lots more milk. But what’s driving this isn’t some growing demand for milk.
And all of these factors come together such that the price for milk is very low. The price for milk has been below many farmers’ breakeven point for at least five, six years in a row.
And so farms feel this pressure to survive on volume. If the milk price is going to be lower, then the only way I can really make it work is to double down, get more cows, get big to survive on volume. And it creates this kind of treadmill where we keep over producing, even though there’s more milk than anyone wants to use.
And then on the other side of that, there’s also fewer and fewer buyers of milk.
Then the processors that also process milk have more bargaining power. There’s fewer of them. They have high levels of regional control. So farmers aren’t in a great position to ask for a higher price. You even see really powerful retailers like Walmart vertically integrating into milk production, buying their own milk processing plants, which just increases their bargaining power even more. So all this suppresses the price of milk and has been pushing small farms out of business.
At every step of the path from barn to store shelf, the pressure is on to get big or get out. That push intensified in the 1970’s to have government regulators step aside and “let the market decide”. And that lack of regulation – it favors the bigger players at every step.
The challenges of small-scale farming go way, way back before the 1970’s. And farmers have been coming together to pool their crops and build power since long before that, building cooperatives in dairy and in many other crops around the globe. Even outside of the challenges of massive corporate consolidation that we’ve been talking about.
Cooperatives are a way for farmers to bundle their product together and bargain for a better price, get a contract to meet a certain supply volume, guarantee supply to a processor, and share things like transportation and storage.
Ever smelled milk left out on a hot day? I’m guessing you know just how important timely transportation and refrigeration are for the dairy industry. But that sort of large-scale infrastructure is beyond the means of many small-scale farmers. And so, cooperatives have long been an essential part of the dairy industry.
But like a lot of agriculture they’ve also been facing pressures to consolidate themselves in order to negotiate with bigger and bigger buyers, or they feel pressured to vertically integrate in the same way that Walmart is buying processors. You also see cooperatives buying processors and taking processing. This can sometimes be really great to cut out middlemen and, you know, share more of the wealth directly with farmers and cooperatively own your own processing plant.
OK, digression here. But back in the first season, we spoke with Andres Gonzales of Manduvira cooperative in Paraguay. And those small-scale sugar farmers were doing exactly what Claire is talking about here: cutting out the middlemen.
Andres Gonzales (from Episode 2, Nestle’s KitKat Unwrapped series of For a Better World):
Our dream was to manage most of the production value chain. We realized the only way we could really make a profit was by exporting directly. As a small group of producers, we took an incredible leap forward. We went from being simple producers of sugarcane to being producers of sugar and exporters too. Our idea is to produce and to export the sugar ourselves without an intermediary.
They started the first farmer-owned cooperative sugar processing mill. And instead of making sugar industry barons richer, they were growing a community-focused food system. They are one of those success stories that I point to, one of those moments that shows how cooperative ownership and fair trade can really shift historical systems of who has power and who gets to profit.
But things are going a little differently in the U.S. dairy industry.
But we’ve also seen as some cooperatives get really, really big, there can be a conflict of interest when really, really big cooperatives are owning processing. If they’re making choices to keep those profits with the processing business, with their executives, with their management and not actually sharing that with the farmers. That becomes an issue where this entity that is supposed to be negotiating for you and supposed to be getting you a fair price and making sure your milk in this instance has a place to go, might actually be now squeezing you as the only place where you can sell your milk and possibly the only place where you can process it, or your only connection to processors and really getting some perverse incentives.
This is absolutely not the same thing as the story of Manduvira cooperative. And the biggest of these mega-cooperatives is called…
Dairy Farmers of America
Through a series of mergers and buying up smaller local cooperatives, they’ve gotten absolutely massive.
About 30% of all milk in the United States passes through this one company. That’s a significant amount of the milk market that they control.
And that puts Dairy Farmers of America in a very powerful position.
OK, so that magic school bus we started on is now spinning deep in the inner workings of the pipeline taking milk from the barn to the supermarket. To recap, you’ve got farmers like Jim, and farmers way bigger than him too. They often get together to form a cooperative. That cooperative then works with the milk truck that drives around and picks up the milk from the farms. Nobody wants spoiled milk. So they have huge refrigerated tanks to keep it cold. But that cooperative is not necessarily selling that milk straight to the supermarket. Instead, then it goes to processors, the ones who make it into the butter, yogurt, or other ingredients that then make their way to the store.
And that distinction between cooperative and processor is about to become key to our story.
Because in the Spring of 2020, the mega cooperative Dairy Farmers of America finalized a deal to buy up Dean Foods, one of the biggest processors out there. Now this “mega-coop” just got EVEN more massive.
And a lot of farmers aren’t too happy about it.
All this expansion and all this processing has made DFA perversely interested in getting profits from their processing business, as opposed to ensuring that they’re watching out for their farmers’ best interests.
Dairy Farmers of America (that’s the DFA that Claire just mentioned) is kinda playing both sides here.
They are a cooperative. Farmers do own Dairy Farmers of America. And yet farmers make their money based on their milk check, based on how much they’re receiving from milk.
But Dairy Farmers of America? They earn more profits from their processing business. And the lower the price they pay to farmers, the more money they make.
Low milk prices are bad for farmers. But they are good for processors. And now, Dairy Farmers of America is acting more like a big processor than an organization advocating for farmers.
So they have all these perverse incentives to actually lower the prices paid to their farmer members, even though they’re ostensibly the ones who are supposed to be running the show.
Farmers feel like they’re getting shorted in the interest of bigger profits for Dairy Farmers of America.
But there’s more. Farmers also were pretty sure that the whole system was rigged against them. Even before Dairy Farmers of America bought Dean Foods, the two had what’s called an “exclusive supply arrangement.” That means that any farmers who wanted to supply their milk to Dean Foods didn’t have a choice. If you want to sell to Dean Foods, who has some 25 brands and a massive reach across 50 states, then you’re forced to go through Dairy Farmers of America.
The years of Dairy Farmers of America gobbling up other cooperatives, and of processors like Dean Foods buying up other processors – well, all that consolidation means that farmers have fewer and fewer choices of who to sell to and how to get their milk to market.
You want a way to get your milk to market, sorry, there’s one or two major cooperatives in your region and they have an agreement not to poach each others’ farmers.
And so farmers were just feeling the democratic processes that should exist within a co-op for them to elect board members and change management and get better prices just weren’t working. And so they sued their own cooperative arguing that they were doing all these anti-competitive things that violated antitrust law and colluding with processors to suppress prices paid for milk.
That’s right, the farmers who owned the cooperative sued the business that they jointly owned, calling it “a milk cartel.” There wasn’t just one lawsuit, not just a few disgruntled farmers. There have been a number of them across the U.S.
Leah Douglas reported in the Counter a few years back, chronicling some of those individuals’ stories of why they sued. One, to read from the article,
“complained that Dairy Farmers of America used its control over local milk haulers to prevent him from doing business with anyone else. For [another], it was the abuse of food safety protocols. He charges that milk inspectors controlled by DFA threatened him and many other farmers with health care violations if they dared to raise questions about DFA’s business practices.”
In short, those farmers were arguing that all that market power that Dairy Farmers of America had built up over the years was being abused. They were rigging the system.
And several of those lawsuits were successful. They were settlements. So DFA never admitted guilt, but they’ve paid out tens of millions of dollars in these antitrust settlements which shows that the farmers had a pretty strong case. Big corporations don’t just pay tens of million dollars for nothing. So yeah, it really makes a strong claim that this cooperative was engaging in collusive and anti-competitive behavior against their farmers’ best interests to suppress the price of milk.
Collusive, anti-competitive behavior – that’s the technical term for all that where the Dairy Farmers of America cooperative was working to limit their members’ options to sell their milk.
Farmers only got to the point of suing their cooperative after other attempts at accountability didn’t work.
“More than 7000 dairy farmers in southeastern states say they were betrayed by their own representative, called the Dairy Farmers of America incorporated, the largest milk marketer in the U.S.”
“They got this whole thing structured as a company under a co-op, and yet they tell the farmers it’s your co-op.”
“Many at the meeting believe large farms are getting more financial help and yet smaller farmers are being pushed to grow and produce much more milk than what’s needed, and that’s what’s lowering the cost of milk.”
“Nothing will wake you up faster to the reality than low milk prices and I would say that the period that they’re going through right now, since, it’s been the worst since 2009.”
But these concerns had been brewing for years.
I think Dairy Farmers of America spokespeople will definitely say, “we absolutely serve farmers’ interests. This organization exists to serve farmers,” but I think there’s a lot of disagreement among the farmers about whether or not that’s true anymore. And whether or not the cooperative is actually making decisions in their best interests, whether that’s taking on these big, risky investments in processing that even though in some ways they harm farmers by monopolizing the industry, farmers actually have to pay for those investments.
While farmer cooperatives exist to build power for their members and stand up to big agribusiness firms, there have long been questions about whose interests Dairy Farmers of America is actually serving. Back in the early 2000’s, then CEO of Dairy Farmers of America Gary Hanman got a lot of attention for his high-rolling style. He and other executives jetted about on a private plane – so cleverly named Delta Foxtrot Alpha – DFA, get it? He led a string of mergers and acquisitions – and DFA just kept growing and getting bigger. Meanwhile, in this same time period, the number of dairy farmers across the country was shrinking. The success of their cooperative was not trickling down to farmers.
Hanman and another executive later got fined $12 million dollars for some shady cheese-trading deals to illegally manipulate the price of milk on the Chicago Mercantile Exchange.
There were a few reforms – it sounds like that private plane got sold off, but not too much else changed in the overall power and structure of the cooperative, or their business dealings.
Cooperatives are supposed to be fundamentally democratic, serving their members’ interests. But that’s not what was happening here.
And here’s where things take a turn.
We started out this season talking about Chobani and that “fair trade dairy” label that they launched with Fair Trade USA. Well, guess who is actually the fair trade certified supplier?
That’s right, Dairy Farmers of America.
This mega cooperative that’s using its massive power to undercut farmers and squeeze them out of the dairy business – according to those farmers’ own lawsuits. They’re now certified “fair trade.”
One of those big lawsuits was actually settled while the standard was being tested out.
Fair trade cooperative sure sounds nice. Earlier this episode, I mentioned the Manduvira cooperative where small-scale sugar farmers in Paraguay have come together to own their own mill. And that mill is building a stronger community for all farmers and their families. Well, that’s not what’s happening here.
I asked Claire what her thoughts were on this new “fair trade dairy” label, and she got right to the heart of it: it’s a question of democracy and power.
I think it’s not really clear to me with these standards that workers have a seat at the table. And to the broader question of DFA being a cooperative of questionable governance, I think a lot of farmers also feel like they don’t have a seat at the table within their cooperative. And so, how is this label then actually, meaningfully distributing power or literal wealth, how is a premium going to farmers? Is a premium going directly to workers? Do workers have a say in these standards? If Chobani is based in New York and farm workers actually have the right to unionize in New York. I don’t know why it isn’t required that these farms are unionized? I think that’s a great question.
Those protections of the right to unionize that Claire mentions here is just one of the victories that dairy farmworkers and others won through organizing. And those organizing protections that farmworkers won started with Crispin and his fellow workers with the Workers Center of Central New York as we talked about back in Episode 1.
The workers won those gains through their own organizing. But Chobani refused to negotiate with them. And they developed this “fair trade dairy” program without their involvement.
It just strikes me as a lot of questions about how this, how these premiums or governance structures are actually structured given that the entities involved, DFA, have a proven history of making decisions that are counter to the interest of their farmers and focusing on processing profits at the expense of farmers. And so not sharing wealth down the chain in that way.
But also farmers having a huge history of labor violations and really horrid working conditions on these dairy farms. So yeah, all the entities involved have a history of poor conduct. And I’m not sure how this label affects the democracy issues within the dairy farmers’ cooperative or how it affects workers the democracy issue with workers on farms and workers not having a lot of power on these farms.
Claire cuts right to the point. Both farmers and workers are harmed by the consolidation that’s happening in the dairy industry. In both cases, Claire points to the root cause: the ability to build power and bargain.
In the same way that we’re talking about cooperatives and farmers being able to come together and bargain with fewer and fewer buyers, farm workers, unlike other workers, don’t have protections to unionize, which is them coming together to bargain.
And so that is some interpretation of anti-trusts are really thinking about coordination rights, who has the right to come together and bargain. And this is labor law, so it’s not antitrust, but it’s another place where, in this case workers don’t have those same bargaining rights and that really exacerbates these imbalances of power that we’re talking about for farmers in the sense that big processors have the ability to squeeze farmers who then have less money to give to their workers.
Who has the power? It’s a question at the root of the exploitation in dairy barns and in the marketplace. And addressing that exploitation requires addressing those root causes.
When you’re talking about this question of how do you give workers a voice on the job, more say in the business, how do you give them dignity and power in the workplace, there’s obviously labor law and rights that need to be extended to all workers that are not equally extended right now. Farmworkers are excluded from those. But you also need to be looking at the structure of the entire economy and who holds power within this supply chain and because of increasing concentration, its power is really hoarded at this one point. And that minimizes the bargaining position for everyone else, including workers.
In the first two episodes of this season, we heard about how Crispin and the Workers’ Center of Central New York and allies came together to win more protections for their organizing. They recognized that was the first step in building more power for the dairy workers – and for other farmworkers throughout the state. And in the third episode, we heard from Marita with Migrant Justice about how they have a different approach. Through their analysis, they saw who had power in the supply chain and that’s where they went. Their signed agreement between all those farmworkers and the CEO of Ben & Jerry’s is their worker-led approach to tackling this question of power.
Claire’s work looks at the question of how to keep these big mega corporations from hoarding up all the wealth and power. I ask her how she and the Open Markets Institute propose addressing this problem of consolidation in dairy.
To go back to this idea of what are the fair rules here? I think we can look at a market and understand when there are too few buyers for farmers to get a competitive price. And you can then use antitrust to break up markets where there’s not sufficient competition between milk processors, or in this case between cooperatives, and for farmers to sell their milk.
There’s a couple of key laws on the books that broadly fall under the heading of “antitrust” that Claire uses there. And those laws date back to an era that rivals our own for concentration of wealth and power: In the late 1800s, consolidation and corruption were running at all time highs. You might have heard the term “Robber Barons”? That dates from that time. These wealthy industrialists amassed huge fortunes in developing railroads, logging off forests, and in the growing steel and oil industries.
And they took advantage of labor laws that hadn’t really caught up with the Industrial Revolution to exploit and underpay workers at every turn. Then they used those fortunes to buy up more and more businesses and then bend the rules in their own favor. That era sometimes gets called the “Gilded Age” for the thin veneer of wealth and glitz layered on top of widespread poverty and social problems – if private jets had been around, I’m pretty sure those guys would have had them. And flown them about even as farmers went out of business and the climate crisis worsened.
Anyhow, the corruption and massive monopolies that these Robber Barons built up got to a point where outraged advocates finally forced Congress to take action. Congress passed a series of laws, the “antitrust laws” that Claire has been referring to. These laws prohibit one company from controlling too much of a given sector of the market – a monopoly – as well as fixing prices or otherwise rigging the terms of business to reduce competition.
The Federal Trade Commission was created at this time as well. Their mission is to enforce antitrust law and protect consumers from unfair trading and scammy business practices because while the laws date from the days of top hats & horse-drawn buggies, the issues of corporate power they sought to regulate are all-too relevant today.
And one last bit of context here. The term “anti-trust” itself is sort of a relic of that Robber Baron age. Trusts were legal arrangements that were used to consolidate separate companies into large conglomerates. That practice died out some time in the early 20th century when the US government just made it easier to just create new corporations, making the practice obsolete. The name lives on – a holdover from old banking deals. You’ll also hear anti-trust law called “competition law” or “anti-monopoly law.” The gist is the same – rules to keep companies from rigging markets in their favor and to allow for fair competition.
Back to Claire, who’s continuing to describe the ways that legislators and the Federal Trade Commission could act to address the consolidation in the dairy industry.
At the end of the day, I think it all comes down to a more democratic economy. One that’s actually healthily and functionally democratic so that these decisions about how much workers are getting paid, their working conditions, how much farmers are getting paid are just more evenly shared and not housed in a handful of very few, very large privately investor-owned businesses, that are also not even operating anything we would consider a fair and open market.
It’s one thing to try and come up with a good business that is doing the right thing, paying workers, fair trade that can succeed, but even if you’re doing the right thing, there are all these other factors and rules of the game that are stacked against you that don’t really have anything to do with whether or not you’re doing good business. They just boil down to how much bargaining power do you have? How big are you? How rich are you? You shouldn’t be able to compete just because you have the most venture capital investment and can burn cash to run other people out of business. You shouldn’t be able to compete by just having the most brute force bargaining power so that you can get the best spot on the shelf.
It’s really not just a fair open market where you can vote with your fork. There’s all these different policies and advantages and regulations we’ve rolled back that allow for those with financial backing power, size to really gain an unfair advantage.
It’s a rigged system from the top. I ask Claire what it would look like to have a truly fair dairy industry instead.
I think it’s one again in which power is more properly distributed and business is conducted in a way where no one is cheating or bullying other people in the supply chain. It definitely starts with the workers.
We don’t see dairy labor when we think of farm labor, but even a small dairy farm is often hiring workers. And that creates all kinds of problems with which workers are protected under different workplace safety provisions. It starts at the base with who is doing the work and I think fairness needs to look like workers actually having rights and a voice and meaningful power within the decision-making of a farm and also within these larger supply chains.
It starts with workers getting a fair wage, getting sufficient protections in what’s actually a pretty dangerous and stressful industry with really crazy hours and some dangerous working conditions. But then also more meaningfully, having a say on the job, having representation, having a union.
Collective bargaining definitely starts with the workers, but then the same goes for the farmers. You see these cooperatives form because farmers were looking for ways to come together and bargain for a better, fair price. And I think cooperatives can do that, but you know you need to be sure that the cooperative is actually serving its members’ interests. And really evaluating some of these cooperatives where you have members expressing that decisions are not being made in their interests and finding ways either within the cooperative or eventually outside the cooperative to regulate that and make sure those are actually functioning
And then I think on a big picture, it’s hard to talk about dairy without also talking about all these incentives and policies that really encourage overproduction in the dairy industry.
For all these reasons between federal policy and large corporate interests and large consolidated cooperatives, we’re having this perpetual system where farmers are just producing more milk than anyone wants. And so this market is not working. It’s producing more than anyone wants. It’s not functioning for the public, it’s over-producing, it’s not functioning for farmers. It’s suppressing the price. It’s definitely not working for workers.
Remember in the first episode, when Crispin Hernandez was describing his 12 to 14 hour shift:
Crispin Hernandez (from Episode 1, Unfair Dairy series of For a Better World):
And you had to be running while working, you had to be running from place to place because the manager wanted to make sure that they had their production. And so after 7 hours of a session of milking, I would always feel like i was falling behind.
Always going, rushing: and that rush? To produce more and more milk – more really than anyone in the U.S. is actually drinking. The theme of supply management that Claire mentions here is one that Jim Goodman brought up in the last episode too.
There is a lot of government intervention in the dairy industry and it’s just a matter of how can it be correct because right now it’s not working in a way that makes any sense for much of anyone except the people who want really rock bottom cheap milk. And that is these processing companies.
They make the most money when milk is cheap and these are the most powerful, politically powerful entities. Your Chobani’s, your Kraft foods, your whomever whey powder, milk powder, exporters. These are the entities that make a lot of money when milk is cheap, including Dairy Farmers of America. And they’re the ones who benefit from this huge glut of milk and milk being produced at a price below the cost of production. And so that needs to stop.
My conversation with Claire took a deep dive into the systems of money and power that prop up the dairy industry. Behind the shared struggles of farmers and farmworkers to earn a fair livelihood, there’s a whole rigged system. Farmers organize to form cooperatives to bargain for fair prices, share resources, and make their way in the market against bigger businesses. But, as we’ve heard today, this cooperative, Dairy Farmers of America, got away from farmers’ control. Money from their new businesses went to private jets and corruption. It did nothing to protect farmers’ livelihoods. Instead, as a few at the top of Dairy Farmers of America and other processors got richer, the total count of dairy farmers in the U.S. went down.
And here’s the kicker for me. This same cooperative that’s getting sued by its own farmer members for rigging the system against them – this cooperative is the one that Fair Trade USA has certified as suppliers for their “fair trade dairy” label. We’ve already seen that this label is opposed by those organizing with farmworkers in Chobani’s supply chain, the very workers that the label claims to defend.
Claire sums it up so well when she points out what farmers and farmworkers have in common here – in both cases, it’s a question of having democratic institutions to support their organizing, whether that’s a cooperative or a farmworker organization or union to better build power and negotiate.
And in each case, it seems like Fair Trade USA has chosen not to align themselves with democratic institutions. I bring this up because the term “fair trade” has a meaning, or at least it used to. There’s actually a whole list of internationally-agreed on fair trade principles. Support for democratic and transparent institutions is one of them. But that’s not what this label does.
Instead of aligning with democratic, farmer-controlled and worker-led organizations, Fair Trade USA has signed off on a label that rebrands the exploitation of the dairy industry as “fair.”
If you work on a farm that’s participating in Chobani’s supply chain, and this “fair trade dairy” program, I would love to hear your experience. We’ll include ways to get in touch in the show notes.
Throughout this series, we’ve heard from farmworker organizers and a farmer about their daily realities trying to make ends meet and support themselves within the ever-consolidating industrial dairy system.
It’s a system where more cows are producing ever more milk on ever fewer farms. It’s a system where low prices are squeezing farmers and driving them out of business. It’s a system where the constant push for more and cheaper milk is driving labor abuses, and keeping the people who milk the cows in unsafe conditions both at work and in their homes.
And all of this is for the benefit of those few processors who make more money off of cheap milk. There’s no way to rebrand this system as “fair.”
We’ve heard what the push to produce this glut of cheap milk does to the workers who spend their long shifts rushing around in dangerous environments. Crispin’s description of the intensity of the work sticks with me from the first episode. And we’ve heard the desperate push to get big or get out that pushes out small-scale farmers like Jim Goodman, working with just family labor.
Next episode, we’ll be talking with guests from the Institute for Agriculture and Trade Policy about what this push to produce more and still more milk does to all of us—and how it is a big deal for everyone who hopes for a habitable planet.
Until then, stay in touch! Follow For a Better World on Apple podcasts or wherever you’re listening. And sign up for our newsletter for more ways to work to build a food system that works for all of us, not just those few sitting at the top with their private jets.
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For a Better World is made possible by our small but mighty team. Our show is edited by Joshua Moore, Katie Gardner is our producer, Anna Canning is our script writer, our storytellers are Ryan Zinn and Anna Canning, our music was composed by Mark Robertson, and I’m your host and executive director of Fair World Project Dana Geffner. Thank you for listening!