DFA Had Good Intent + Now Bad Outcomes?

The NewYorker (2021) started off an article with: In 1980, the country had more than three hundred thousand dairy farms. Today there are only about thirty thousand. And with that statement of fact, they jumped into an article questioning if it was time to break up BIG AG.

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Agricultural Cooperatives

Co-op Definition

The International Cooperative Alliance defines a co-op as: an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.

My Observation

Historically, until the time of industrialization, farms were globally small and usually family run. Competition was then, more or less, equal among farmers in terms of product and getting product to markets.

But then some farms started to be run by businessmen who found ways to improve labor efficiency, increase yields, and buy up smaller farms for the land; all resulting in what we now live with, that is large industrialized farming.

To compete against these ever growing, large, agricultural, global conglomerates, smaller family-owned farms decided to work cooperatively so they could stand at the same production level as those industrial farms. By organizing, they had hopes of being able to get their food products to market, and compete for consumers, on par with the larger, better financed companies.

While becoming a “co-op” may have been a good idea at the time, it may have also (eventually and inevitably) turned into a problem. As we all know, power corrupts, and agricultural cooperatives became (in my view) too easily co-opted into becoming exactly what they were initially fighting against.

Why Co-ops

Co-ops were intended to be like a union, where smaller and medium-sized farms could unite and increase their bargaining power as a way to compete with larger, industrial sized farms. Specifically, the GAO writes, a milk-based co-op would:

• Negotiate with dairy processors for price and terms of sale, such as quality and timing of delivery.
• Coordinate the collection and hauling of milk, including weighing and testing for quality and safety.
• Manage milk processing, including bottling, production of milk products, and branding of products.

Dairy Co-op General Data

Because my focus is on dairy, here is what I could find on dairy co-ops specifically.

• In 2002 dairy co-ops represented ~13% of all ag marketing co-ops in the USA.
• In 2017, co-ops managed ~85% of milk marketed by USA producers.
• From 1997 to 2017: the number of USA dairy farms decreased from 125,041 to 54,599.
• From 1997 to 2017: the number of dairy cows per farm increased from 73 to 175.
• From 1970 + 2017: USA had 3,749 dairy processing plants, then only ~1,305

Industrialized Dairy Corporations

Let me start with a list of what various people say about very large, industrialized dairy corporations. The overall point is that industrial animal farming leads to treating animals like products, regardless of how cruel or tortious that treatment may be, essentially they are not handled as an animal so much as a meat or dairy product. There is no humanity or rustic farm charm in over-crowded, concrete and steel, inorganic industrialized dairy farming.

• Industrialized dairy farms have a large waste problem that usually result in pollution of land, air, and waterways (1).
  • According to the EPA, a 2k cow dairy generates more than 240k pounds of manure daily.
  • USDA estimates that manure from 200 milking cows produces as much nitrogen as sewage from a community of 10,000 people.
• Industrialized cows live in crowded and unsanitary conditions, and receive doses of antibiotics to prevent disease and promote growth. Thus overusing antibiotics resulting in the growth of antibiotic-resistant bacteria (2). 
• Many argue the cow endures a short life of suffering,and then they are sent for slaughter for hamburger meat (3).
• Unsustainable dairy farming and feed production can lead to the loss of ecologically important areas, such as prairies, wetlands, and forests. Dairy cows and their manure produce greenhouse gas emissions which contribute to climate change (4).

Top Dairy Farms or Co-ops (5)

Agricultural cooperatives are not a new phenomenon, as they started in 1922 through the Capper-Volstead Act. This Act happened during the 1929-1933 Great Depression as a way to assist small family-owned farms by allowing them to join one another in farmer-owned co-ops, and made these organizations exempt from antitrust laws.

Honestly, by all indications this Act worked well when the farms were small family owned, but now it is supporting large, industrial farms and very capitalistic views of animals as commodity.

Here is a list of the top five dairy co-ops registered in the USA:

1. Dairy Farmers of America (DFA) Co-op: Borden Cheese, Breakstone’s Butter, Cache Valley, Cass Clay, Craigs Creamery, Dairy Maid Dairy, Falfurrias Butter, Guida’s Dairy, Keller’s Creamery Butter, Kemps, La Vaquita, Live Real Farms, Oakhurst Dairy, Plugrá Butter, and Sport Shake.
2. Nestle: Carnation, Coffee-mate, Drumstick, Häagen-Dazs, Nesquik, and La Lechera, to name a few.
3. Danone of North America: Activia, Danimals, Dannon, Horizon Organic, International Delight, Oikos, Left Field Farms, YoCrunch, and DanActive.
4. Schreiber Foods
5. Kraft-Heinz: Velveeta, Cracker Barrel cheddar cheese, Philadelphia, Kraft, Athenos, Breakstone’s cottage cheese and sour cream, Cheese-Whiz, and Knudsen.

I assume you recognize many of the “co-op” names? Not exactly referencing small family farms, do they?

Dairy Farmers of America

The Dairy Farmers of America (DFA) was created in 1998 out of a merger of four regional co-ops. This meant regional farmers joined one another to create a cooperative designed to keep them all in business, because by combining resources it was seen as a way to increase financial power in the market.

The problem I have now, is that the Dairy Farmers of America (DFA), and similar organizations, have turned out to be no different from other large corporate businesses, and their daily business practices seem to reflect that status.

• They are not required to disclose how much their organization’s managers and executives earn.
• The NewYorker notes that the DFA has paid out big money due to fines and class-action lawsuits brought by its own members (!), for:
  • Attempting to manipulate milk prices on the Chicago Mercantile Exchange and, allegedly fixing milk prices in the Southeast.

• Allegedly it participated in an illegal conspiracy to restrain competition, fix and suppress prices, and control the buying and selling of raw milk in the Northeast.

• Allegedly it is strategically buying milk processors and creating a conflict of interest.

As stated above, the issues are not only seen with milk, but it is part of meat and seed processing as well.

• 1982 the four largest beef-packing companies went from packing ~30% to now ~80% of the market
• 1994 seed manufacturers had 21% market share, in 2018 it was 66%.

As a result, small family farms wind up paying more for farm inputs (like seeds, fertilizers) while also selling their products for a lower price, and to fewer buyers.

Additionally, the NewYorker reports, that the DFA was one of the folks directing farmers to dump milk during the start of the pandemic. A time when so many needed food support.

To see who the members of DFA are, I reviewed their website (on 8/18/2021). Out of the 72 regional committee members and management team, only 11 were women, and all the men were white. There was no obvious person of color involved in the management of the DFA. (This is one of the many hidden, institutionalized racism that appears throughout various aspects of institutional farming.)

• In 2020, the members of DFA NUMBERED 12.5+K, and sold 56B pounds of milk (or 25% of all milk sold).
• In 2020, DFA purchased Dean Foods, the largest milk processor in the USA.
• Thus, the economic and governmental power the DFA has accrued has grown significantly since its inception.

As part of that purchase, DFA apparently acquired a 10-year exclusive contract with all the bottling plants within certain regional areas of the country. If you are not a co-op member, can you still get your milk purchased and bottled?

If the DFA is the only buyer for the milk, it is called a monopsony, typically leading to lower prices for farmers milk, and as smaller farmers get squeezed financially, they have to join DFA or go out of business; and their farms may then be bought up cheaply and absorbed into larger farms. The NewYorker goes on to say that nationally, the four largest dairy co-ops now control more than fifty per cent of the market.

• Investopedia: A monopsony is a market condition in which there is only one buyer. Because there is only one buyer for a good or service, the buyer sets the demand, and therefore, controls the price. Monopsonies, like monopolies, are inefficient to a free market, where supply and demand regulate prices to be fair for consumers.

My Viewpoint

In my opinion, small and medium sized farms (as well as the environment, food systems, and animals) became disadvantaged in an industrial agricultural world. They were often overlooked by federal and state funding, had less sway in receiving administorial necessary support, and wound up not being able to get food products into the same markets for the same costs as larger, industrial farms.

So gathering together as a co-op once may have helped smaller farms to approach the volume of product to get noticed by processing and packaging companies. But unfortunately, they also got unwanted attention from money-men who were more interested in profits, and not farming. The DFA has morphed, in my opinion, into a large and corrupt, for-profit, business that often, it appears to me, negates any good created by the original co-op (6, 7).

So while the organization focused latterly, as they were in support of farmers. As soon as the corporate eyes viewed a vertical option, they moved quickly to capitalize on the opportunity to better control the means of production, through controlling the sales price farmers could receive. This helped the organizations bottom line, but hurt the farmers who were small or who choose not become a member.

What is Wrong with Large Coops?

WashingtonMonthly reports that in 2010 research was started by the Obama administration to talk with and listen to farmers across the country. They reported a fixed system that allows a corporation to all all the shots regarding our food.

• It works like this: to do business nowadays, most chicken farmers need to contract with a processing company.
• The company delivers them feed and chicks, which farmers raise into full-size birds.
• The same company then buys those same birds back when they are full grown.
• The problem is that the big processing company is usually the only game in town. So it can—and usually does control production.

Farmers shared the truth of their experience to the politicians, but nothing happened,

Large Corporations Usually Win

Obama’s administration had the governmental history of using two pieces of law: the Sherman Antitrust Act of 1890 and the Clayton Act of 1914.

In 1919 the Federal Trade Commission used the Clayton Act to reduce the power of the top meatpacking companies. These companies, the FTC noted, “had attained such a dominant position that they control at will the market in which they buy their supplies, the market in which they sell their products, and hold the fortunes of their competitors in their hands.”

The other main piece of law was the 1921 Packers and Stockyards Act, signed by President Warren Harding. It broadly prohibited unfair and discriminatory conduct in the marketplace and established standards by which to hold meatpacking companies and stockyards accountable. Often called the “Farmer and Rancher Bill of Rights,” the act made it illegal for big meatpackers to pay farmers less than market value for their livestock or to arbitrarily advantage some farmers at the expense of others. As one congressman noted at the time, the Packers and Stockyards Act was “a most comprehensive measure,” possibly extending “farther than any previous law into the regulation of private business.”

Understandable Farmers Reaction

In 1890, agrarian populists are noted as helping win the passage of the Sherman Act; USA’s first antitrust law. For quite a while now, rural agricultural workers (farmers and others) are essentially in the same space now.

• NewYorker: In a poll conducted last year by Family Farm Action, eighty-one per cent of rural respondents said that they were more likely to vote for a candidate who believed that “a handful of corporate monopolies now run our entire food system,” and who would impose “a moratorium on factory farms and corporate monopolies in food and agriculture.” 

In July 2021, the Family Farm Action (FFA) and the United Food and Commercial Workers (UFCW) introduced a legislation: to both chambers of Congress that will empower America’s workers and farmers while transforming the power, policy, and financial structures that underpin the U.S. meat and dairy production systems. The Farm System Reform Act, introduced by Senator Booker (D-NJ) and Representative Khanna (D-CA), respectively, was filed with the support of 38 farm and labor groups. The intent is to diminish corporate control, and increase farmer and worker control over the means of food production.

International Influences

Meanwhile, Politico writes thats China is buying up USA farmlands (frankly, so is Mr. Gates 1). This move has caught the eye of government and political leaders, who are each concerned with having an “adversary” own major aspects of our food (and other) systems.

• Politico: Chinese firms have expanded their presence in American agriculture over the last decade by snapping up farmland and purchasing major agribusinesses, like pork processing giant Smithfield Foods.
• USDA reported in 2018 that China’s agricultural investments in other nations had grown more than tenfold since 2009.
• By the start of 2020, Chinese owners controlled about 192,000 agricultural acres in the U.S., worth $1.9 billion, including land used for farming, ranching and forestry, according to the Agriculture Department.

The Federal legislative committee reviewing this proposal, have already adopted a very specific “Newhouse’s amendment” to the AG-FDA spending bill (H.R. 4356 (117): that would block any new agricultural purchases by companies that are wholly or partly controlled by the Chinese government and bar Chinese-owned farms from tapping federal support programs.

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My Favorite Dairies + Coops

Current Favorite Dairy (Non Co-op): Straus Family Creamery

The Straus Family Creamery started in the 1940s in Northern California. From their website, they write: The family had stopped using herbicides on the farm in the mid-1970s, and in the early 1980s, Albert replaced tilling fields, used to grow silage, with a no-till method of planting, to prevent soil erosion and reduce fuel consumption. He also stopped using chemical fertilizers (which had been minimal for decades) in the mid-1980s.

Straus is the first recognized 100% organic creamery. But to keep up with demand, and their intent to not have more than 1 cow per acre of land, they buy certified organic, Non-GMO Project Verified milk from eleven other organic, local family farms: the two Tresch Family Dairy Farms, Hughes Family Dairy, Correia Family Dairy, Brazil Family Farm, Silacci Dairy, Mendoza Dairy, Cypress Lane Ranch, Silva Family Dairy, Drakes View Dairy, and JJ’s Family Dairy.

The milk is pasteurized but not homogenized and is sold in redeemable glass bottles (1). This milk is used by Cowgirl Creamery for their wonderful cheese. Specifically, they source milk from the Tresch Family Farms in Sonoma (as part of Straus Family Creamery) and Bivalve Dairy in West Marin. I cannot say enough about how good their cheese is, you must give it a try. My spouse absolutely loves picking up some cheese, bread, and hanging out by the ocean.

Current Favorite Dairy (Co-op): Tillamook

One of my favorite West Coast dairy co-ops is Oregon’s Tillamook which was started in 1909. The Tillamook County Creamery Association (TCCA) is a dairy cooperative headquartered in Tillamook County. Wikipedia reports that it is the 48th largest dairy processor in the USA and by appearances have taken steps to be good community members, taking care of the land and water, and treating the animals under their control well. According to their 2020 Report they have committed to:

• Thriving farms
• Healthful cows
• Enduring ecosystems
• Inspired consumers
• Fulfilled employees
• Enriched communities

They have been in the news but for some good reasons as well as controversies. In 2005 they were the first dairy co-op to ban the Monsanto genetically engineered bovine growth hormone (1). Also, they have achieved a Certified B Corporation status, as recently they have begun to be more aware of the environment, their neighbors, and the impact they can have in their communities for the greater good.

But in 2018, one of the the co-op members, identified as a very large farm (30k cows), was sued for repeatedly poor waste water management. While the co-op said they terminated their contract with the farm, Wikipedia reports they are still buying milk from that farm.

In 2019, a lawsuit was filed accusing the co-op of tricking consumers into thinking their products are sourced from small, local dairies within Tillamook County. In reality, the suit says more than two-thirds of the co-op’s milk comes from one massive farm in Eastern Oregon. The Threemile Canyon Farms is described as an industrial facility that borders on cruelty with ~25k cows. The issue here is that while consumers are willing to pay more for dairy products from farms that treat the cows humanly, at least one farm that supplies milk does not.

My Observations

This is complicated and would take a congressional study to figure out all the laws, policies, and budget lines related to big agricultural businesses. The whole system has gotten so big, it is no longer helpful to actual farmers, only businessmen who do not give a hoot about the land or animals.

I think it would be best if all agricultural subsidies, no matter the form, were reevaluated and only continued if supporting smaller, organic, family run businesses of small to medium size. If they helped these farms move over to regenerative farming. At this point I have only negative thoughts about very large, industrial farming and believe they are the shadow side of all the good small and medium-sized family farms are attempting to do in the world. Someone would really have to prove to me they all do not put profit over any human or animal safety, devalue land and its stewardship, and pollute without any concerns.

Further, while Co-ops were absolutely helpful in the early phases of industrialization, right now those co-ops have shown it is too easy to convert them into those same large, industrial businesses I lament above. Without a clear focus on the greater good, industrializa anything and it causes more harm than any sense of good in the world.

What do you think?

—Patty

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