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US cooperatives pay for milk price fraud
The Dairy Farmers of America (DFA) and Select Milk Producers (SMP) cooperatives have settled a long-running dispute with several members who accuse them of milk price manipulation. The settlement, worth over $34 million (€29,4 million), avoids a conviction.
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The complaining members will be compensated, while DFA and SMP formally admit no wrongdoing. SMP is a smaller dairy cooperative based in Texas, while DFA is the largest dairy cooperative in the US and is based in Kansas City, Missouri. DFA is also ranked third in Rabobank's top 3 list of largest dairy companies in the world.
DFA will pay the largest portion of the settlement, $24,5 million, while SMP will pay $9,9 million, thenews.coop reports.
This is the third time DFA has been sued for milk price manipulation and underpayment of members. The cooperative was convicted back then. In 2015, it had to pay $50 million to a group of members in the Northeast, and in 2013, it even had to pay $140 million for underpayments to a group of members in the Northeast. The $34,4 million now being received by a group of members in the Southwest is therefore a relatively minor loss.