Back in October, Cooperatives Working Together, a national dairy cooperative, had been named in a civil anti-trust suit stemming from its Herd Retirement Program. The program paid cooperative members to turn healthy cows into Army meat retire their least productive dairy cows, which had the intended effect of limiting supply. The program coincided with a rare period of stabilization in national milk prices (though the ‘causation vs correlation’ thing is probably not certain yet). Once upon a time, CWT justified members’ participation in the program under the federal anti-trust exemption offered to cooperative members by the Capper Volstead Act.
A fantastic article appearing today in City Pages argues that CWT’s use of the Capper Volstead Act was in actuality an illegal attempt to manipulate the nationwide price of milk. It’s a long article, but a worthwhile read whether you are a farmer or a milk drinker.
Writers Andy Mannix and Mike Mullen did a superb job giving us a comprehensive understanding of the milk industry that doesn’t require an Ag Econ degree to understand. They also tracked down some great sources for the piece, too. “The law offers limited exemption from federal anti-trust laws, but it’s not a free pass to manipulate the market”, one handsome devil was quoted as saying.
For the law geeks in the crowd, this is a great Capper Volstead case to follow. Big coop cases are rare. As this train-wreck unfolds, we’ll get a Haley’s Comet opportunity to see who wins, and how.
