BATAVIA - U.S. Senator Charles E. Schumer held a constituent forum with Christine A. Varney, Assistant Attorney General in charge of the Department of Justice's (DOJ) Antitrust Division, who came to Batavia, New York at Schumer’s urging to meet with Upstate New York dairy farmers and consumers to explore potential anticompetitive practices in the dairy industry. Varney is the nation’s top antitrust investigator and she came to New York following a request by Schumer. The specific areas of focus during the forum included excessive market concentration, marketplace transparency and vertical integration in the dairy industry. Schumer hosted the meeting with Varney at the Genesee Community College in Batavia. During the meeting, constituents made statements and shared their concerns with Assistant Attorney General Varney.

“For too long farmers have been receiving rock-bottom prices for their products, while prices have not dropped commensurately for consumers at the stores,” Schumer said. “It just doesn’t add up.  New York’s dairy industry has suffered tremendously in the past few years, and as I’ve traveled throughout the state, I’ve heard from constituents who are concerned that the state of competition in New York’s dairy industry may be playing a role. The Department of Justice did the right thing by sending the nation’s top antitrust investigator to New York to discuss this vital issues with the people whose livelihoods depend on a fair and competitive market.”

Dean Foods manages large portions of the market for fluid milk in a number of regions of the United States controlling approximately 90% in Michigan, about 80% in Massachusetts, 80 to 90% in Tennessee, 70% in New England, over 80% in Northern Alabama, and over 70% in northern New Jersey. Schumer said that without such concentrated market conditions, farmers would have greater options as to where they sell their product and would see higher prices on the farm, while consumers would see more competitive prices in the store. 

In an effort to reduce the pressure on struggling dairy farmers, Schumer has called on the Department of Justice and the Federal Trade Commission to take a hard look at the dairy industry and identify where the problems lay.  In response to Schumer’s urging, the nation’s top antitrust official came to New York State to meet with dairy farmers and consumers to explore this problem.

Going forward Schumer highlighted several import steps that fighting for to help get us out of this dairy crisis, and prevent such crises from happening in the future:      

• Addressing lack of competition in milk processing market.  Schumer said that the Nation’s farmers are experiencing low milk prices partly because of a lack of competition in the milk processing market – Dean foods, a company from Texas, controls approximately 70% of the local market.  Schumer said that the Department of Justice must use every tool in its toolbox to take the necessary steps to address this market concentration and prevent the problem from occurring again in the future. 

• Raising the target price of the MILC program.  When the target price of $16.94 was established for the MILC program, it made sense.  However, Schumer said, costs have gone up, so the target price should go up as well.  The MILC program works by providing farmers with aid when the price of milk falls below the target price.

• Raise the reimbursement rate of the MILC program.   Farmers currently receive aid of 45% of the difference between what they are receiving for their milk (per hundredweight) and the $16.94 target price.  Schumer is fighting to raise that reimbursement rate, so farmers can stay solvent in tough times.

• Reform milk marketing orders.  Schumer is pushing to reform the milk marketing orders system used by USDA to determine the price of milk dairy farmers should receive. Schumer said that the current formula doesn’t adequately take the costs of producing milk in the Northeast into account

• Reinstating a dairy pricing system like the successful dairy compact system.  There used to be a dairy compact that existed in the Northeast that helped farmers get a better price for their milk. Schumer said that we should return to such a system, or one like it, that takes into account the challenges of producing milk in the Northeast.

• Ensure that other countries are playing by the rules.  Schumer has introduced the Milk Import Tariff Equity Act, which would stop foreign countries from circumventing our trade laws and flooding our domestic market with cheap dairy by-products.  He has also spearheaded a push to force India and other countries to open their markets to US dairy.