Food Security

Borden to Close Milk Plants in Dothan, AL and Hattiesburg, MS

/ milksheds / Leave a comment

Brings total to 6 Borden plants closed, and 3 sold or leased in 5 months

On Wednesday, August 3rd, Borden Dairy, Inc announced that its Dothan, AL and Hattiesburg, MS milk processing plants would cease operations by September 30, 2022.  

This makes a total of 6 processing facilities shuttered by Borden since May of 2022, when Borden closed its Charleston, SC, and Miami, FL plants.

In July of 2022, Borden sold or leased its 3 Texas processing plants to Hiland Dairy.

Additionally, Borden closed a milk processing facility in Chemung, Illinois  (owned jointly by New Dairy Opco, LLC and Select Milk Producers, Inc., as a joint venture called NDSM Holdings), and a milk plant in DePere, WI in early July, 2022.  Sour cream production reportedly continues in DePere.

The sum of this activity is that 9 plants of 14 listed on the Borden website in a ‘fact sheet‘ will have been closed or leased in 5 months! There is no official word on the plans for the remaining 5 plants as of 10 August, 2022, nor of any licensing deals for the iconic Elsie brand.

As further background, New Dairy Opco, LLC, is the entity formed between KKR and Capitol Peak Partners, two private equity firms, to purchase Borden out of the company’s 2020 bankruptcy process.

While there is no specific information yet available, according to industry sources, somewhere between 25-30 dairy farm producers in Georgia will be affected, several in Tennessee, and an unknown number of farms in Alabama and Mississippi.  

Borden products have a distribution area which covers a wide swath of the lower southeast, including the Gulf’s coastal tourist areas. The Dutch Chocolate is a favorite of milk connoisseurs, and their recent introductions of flavored milks have received great reviews.

It will take some time to sort out all of the farm related ripple effects – beginning with independent producers as well as co-op members shipping to those plants, and extended to the milk haulers delivering to those plants.  Eventually, in this regional ag economy, agribusiness and suppliers will be affected as well. To what degree is unknown, until producers find new cost-feasible markets for their milk. Transportation costs in particular will be a factor in market change decisions for producers.

Beginning with the Charleston closure, and continuing through the Illinois and Wisconsin closures, there has been quite an effect on school milk contracts which had to be reorganized.

What will be the fate of Elsie, Borden’s iconic cow? That’s really hard to know at the moment, but six plants closed in 5 months time is a huge point of concern.  

The southeast is quickly becoming a ‘milk desert,’  which is defined as a region of significant population with limited access to nearby farms which produce nutrient dense foods, and in this case, that’s milk. 

With all of the supply chain disruptions and milk transport issues we’ve seen over the past three years, how are southeast consumers going to be served in the future with the goodness of milk’s essential nutrients?  This is a big picture question which needs to be considered in the name of food security for an area with 25% of the nation’s population.

Borden plant closures are increasing the evolution of ‘milk deserts’ in the Southeast

Borden Announces Closures of Charleston, SC and Miami, FL Milk Plants

/ milksheds / 1 Comment
April 6, 2022

Borden Dairy, Inc. has confirmed that it will be closing two of its milk plants in the southeast, one located at Charleston, SC, and the other in Miami, FL.

Closures are anticipated to be complete by May, 2022.

Borden Dairy Company has provided the following statement:

One plant is located at Charleston, SC, and is often referred to as “the Coburg Dairy,” still referencing and going back to the plant’s founding as Coburg Dairy in 1920. The Coburg Cow is a popular regional landmark, and even has her own Facebook page.

Borden’s Charleston Operation is said to generate approximately $81 Million in annual sales, and has a total workforce of 265 staff members.

The second plant is located at Miami, FL, and the South Florida Business Journal is reporting the property may have already been sold for $21.75 million, almost double what New Dairy Opco paid for the property it purchased through the Borden bankruptcy proceedings of 2020. Approximately 154 employees will be affected by the closure.

These closures will have a ripple effect across the southeast and beyond, as farms will likely incur additional transport costs for getting milk to other markets, and milk haulers (those who haul milk from dairy farms to processing plants) will have to adjust delivery routes.

The Borden company is known to source milk from both independently contracted farms and from milk co-ops, although it is not known how that mix was proportioned at either Charleston or Miami.

School systems and food retailers served by these plants, largely on the southeast coast and in coastal states, will have to find other sources for fresh milk on their shelves.

In the extended circle of the milk supply chain, school systems who are sourced by the Charleston plant are in the process of being notified; farmers and co-ops who supplied milk to these plants, as well as milk haulers who conveyed milk into these delivery destinations have been notified.

Borden Dairy, Inc. is headquartered at Dallas, TX. The company is led by Chairman and Chief Executive Officer Gregg Engles, a former owner of Dean Foods. Pat Boyle is the company’s President.

Borden Dairy operations nationally involve over 3000 employees, 12 milk plants, and over 90 branches in the processing and distribution of milk and dairy products. Borden’s Dutch Chocolate Whole Milk is deemed to be one of the best commercially processed chocolate milks on the market.

This is an evolving story; additional information will be posted as it becomes available.

Dean Foods Sells Majority of Assets to Dairy Farmers of America (DFA) & Prairie Farms

/ milksheds / Leave a comment

 

1_Dean_Foods_DFA_Sale_3

 

DALLAS  – May 1, 2020  – Dean Foods Company (“Dean Foods” or the “Company”) today announced that is has completed the previously announced sales of substantially all of its assets, including the sale of the assets, rights, interests, and properties relating to 44 of the Company’s fluid and frozen facilities to subsidiaries of Dairy Farmers of America (“DFA”).

Dean Foods also announced that it has completed the sale of the assets, rights, interests and properties relating to eight facilities, two distribution branches and certain other assets to Prairie Farms Dairy. The Company also completed the sale of its facility in Reno, Nevada and its “Berkeley Farms” trademark and related intellectual property to Producers Dairy Foods.

These transactions follow a Chapter 11  process which began with a filing under the official name of Southern Foods Group, LLC, on November 12, 2019 in the US Federal Bankruptcy Court, Southern District of Texas, Houston. As early as the day the Chapter 11 was announced, DFA was named as the leading contender to purchase the company.  The Honorable Judge David Jones has served as  the presiding judge.

At the current time, three additional hearing dates are posted on the Epiq website which has been housing the dockets and filings of the proceeding.

  • May 11, 2020: Governmental Bar Date
  • May 20, 2020: An Omnibus Hearing
  • June 24, 2020: An Omnibus Hearing

The process has taken place during a time of monumental chaos in agriculture and dairy created by shifts in consumer behavior exacerbated by the Covid-10 Pandemic.  As consumers followed “Shelter At Home” guidance issued across the country, fluid milk sales rose astronomically for 2 months.  Although they have leveled off a bit, fluid sales are still at much higher levels than in recent years.

The stage seems to be set for  the new owners to capitalize on consumer sentiment to reinvigorate fluid sales of the Dean brands, which have risen considerably during the past two months.  It is not known if  the new owners will maintain,  consolidate, or alter brands as they assume the reins.

“We are pleased to complete these transactions which maximize value for our stakeholders and will enable substantially all of our businesses to continue operating and serving customers across the country,” said Eric Beringause, President and Chief Executive Officer of Dean Foods.

“Our team has put in considerable work over the last several months to find the right partners for our assets that would enable them to continue to succeed while preserving the most jobs possible and to ensure a smooth transition for our customers and partners.

The completion of these sales is a testament to our employees’ efforts. I also want to thank our entire team for their commitment and dedication to Dean Foods not only over the last several months, but over the past several years.  Their hard work has helped Dean Foods build and grow brands and products that customers love, and I feel fortunate to have had the chance to work side-by-side with this extraordinary group.”

The Company also announced that as part of the US Department of Justice’s (“DOJ”) approval of Dean Foods’ transaction with DFA,  DFA has entered into a Consent Decree with the DOJ under which DFA has committed to hold separate and ultimately divest the dairy processing plants located in DePere,WI, Franklin, MA, and Harvard, IL together with certain assets related to the operations at each plant.

Upon closing of these sales, Mr. Beringause has stepped down from his role as President and CEO.

As previously announced on April 4, 2020, the U.S. Bankruptcy Court for the Southern District of Texas (the “Court”) also approved the sale of Dean Foods facility in Miami, Florida to Mana Saves McArthur, LLC, for $16.5 million. The company anticipates completing the transaction early next week.

As previously announced on April 30, 2020, Dean Foods completed the sales of the Company’s Uncle Matt’s business to Harmoni, Inc., and of its Hilo facility and related distribution branches on the Big Island, Kauai and Maui, as well as a license to the Meadow Gold Hawaii brand name and related intellectual property, to MGD Acquisition, LLC.

Additional information is available on the restructuring page of the Company’s website, DeanFoodsRestructuring.com.

In addition, Court filings and other information related to the proceedings are available on a separate website administered by the Company’s claims agent, Epiq Bankruptcy Solutions LLC, at https://dm.epiq11.com/case/southernfoods/dockets, or by calling Epiq representatives toll-free at 1-833-935-1362 or 1-503-597-7660 for calls originating outside of the U.S.

Davis Polk & Wardwell LLP and Norton Rose Fulbright are serving as legal advisors to the Company, Evercore is serving as its investment banker and Alvarez & Marsal is serving as its financial advisor.For Court filings and documents:

To read more about the Department of Justice report – a posted news release:

1 May 2020:   Justice Department Requires Divestitures as Dean Foods Sells Fluid Milk Processing Plants to DFA out of Bankruptcy  – Department Also Closes Investigation into Acquisition of Other Dean Plants by Prairie Farms.

The DOJ news release closes with these words:

As required by the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register.  Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Eric Welsh, Acting Chief, Healthcare and Consumer Products Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street NW, Suite 4100, Washington, DC 20530.  At the conclusion of the 60-day comment period, the U.S. District Court for the Northern District of Illinois may enter the final judgment upon finding it is in the public interest.

Sources: Business Wire, News Releases, and Industry Reports

Dean Chapter 11 – HUGE Step 1: Company Steps Up and Will Honor Previous Obligations to Farms

/ milksheds / Leave a comment
7_Dean_Foods_Bankruptcy_Header_Pay_19_wrkng
A HUGE first step will take place in the Dean Foods Chapter 11 Bankruptcy proceedings.
Dairy Farmers will get their payments for milk delivered in the month prior to the date of the Bankruptcy Filing, an almost unprecedented event.  This news was confirmed by a Dean Foods source familiar with the situation on the evening of Thursday, November 14th.
Dean Foods announced on Tuesday, Nov. 12th, 2019, that it had initiated Chapter 11 Bankruptcy in the United States District and Bankruptcy Court, Southern District of Texas, Houston.
From the moment that filing became known, farmers, who are generally seen as unsecured creditors in a milk company bankruptcy, were extremely concerned that they would never receive payment for a month’s worth of milk. In hard dollars, this would be equal to tens of thousands of dollars to multiple hundreds of thousands of dollars, depending on the size of a producer’s herd.
In this case, officials in the Milk Procurement Division of Dean Foods advocated on behalf of payment for their producers.  In a court document titled  “Docket 29, Declaration of Robert Bruce Matson In Support of Debtors Motion to Pay Critical Vendors,”  Matson, Dean’s Senior Director of Milk Procurement, lays out a brilliant and passionate case on why these farmers deserved payment.
Nationwide, this would have been a loss of several millions of dollars scheduled to flow into dairy farm communities across the country. Those monies in turn would pay farm employees, pay feed bills, machinery repair bills, and a host of other expenses related to farm business operations.
These payments are known to apply to independent producers who contract directly with Dean Foods – it is not yet verified if this also applies to co-op handlers.  That will be clarified as quickly as possible.  Also needing more certain clarification will be payment for Nov. 1-11 milk deliveries to milk plants.  With the Nov. 12 filing date, all deliveries from that day forward will be secured as the company works through the Chapter 11 process.
The ability to make those payments, along with flexibility on how to make those distributions, was enabled by Court Orders entered on Wednesday evening, Nov. 13th, in US Bankruptcy Court, Southern District of Texas.
From that point on, it was up to Dean Foods officials to make determinations on what portions of the Settlement payment would indeed make their way to farms.
In an unprecedented bankruptcy in the dairy and food industry, an even rarer occurrence has taken place with this full payment being delivered to what the court defines as an unsecured creditor. Classification as ‘critical vendors’ helped achieve that end.
Officials at Dean Foods deserve an extraordinary amount of credit for taking farmers into consideration in their court documents and pleadings and getting this money to them which will be crucial for ongoing operations as the company determines a future.  If you have the opportunity to say “Thanks” to any of them, please do so.
While we are a very long way from a more stable future in this Chapter 11 Reorganization of the country’s largest milk processor, this is a HUGE first hurdle to cross.
Before this very complex bankruptcy is over, there will be many ups and downs, good days and bad days, and unexpected twists and turns. But on this Day 3 of Bankruptcy proceedings, many farm families are breathing a lot easier.
We hope for a brighter future for both farmers supplying the plants, and the employees processing and distributing the milk.
This will be a ‘one step at a time process.’  More information will be shared as it becomes available
Timeline thus far in a rather fast-paced and frenzied week:
  • Tuesday, Nov. 12th: Bankruptcy documents filed
  • Wednesday, Nov. 13th:  Court pleadings and Orders entered for ongoing operations
  • Wednesday, Nov. 13th: By close of day, over 125 document filed on court’s docket in less than 48 hours.
  • Thursday, Nov. 14th: Word received farmers would receive payment for their previous month’s milk.
  • Monday, Nov. 18th: Payments expected to be delivered to farmers
We are most thankful to a God who has answered many prayers with this news. The prayers for wisdom and guidance continue as we work to a more stable future.
7_Dean_Foods_Bankruptcy_Header_Pay_19_wrkng

$52 Million Settlement Brings On Bigger Picture Concerns

/ milksheds / Leave a comment

NMPF and Related Entities settle CWT Class Action Lawsuit for $52 Million

No Guilt Admitted by Settlement

Name of Case: Edwards et al v. National Milk Producers Federation, et. al

Website containing several very pertinent court documents: www. boughtmilk. com

 (Note:  It is very troublesome to see that this case challenges the previous immunities, abilities, and parameters of the Clayton Act, Capper-Volsted, and the Sherman Act, important to the function of agricultural co-ops.  However, there will be many statements found in court transcripts, depositions, and other events in this suit which may shed light on the reasons for the Settlement.)

 BRIEF SUMMARY:

 The SETTLEMENT, DEFENDANTS, ATTORNEY FEES, and EXPENSES:

  • A Settlement Amount of $52 Million Dollars has been announced, in a 20-page  agreement dated August 11, 2016.
  • $26 Million is to be placed in an Escrow Account 30 days after preliminary approval [by the Court] of the Settlement Agreement.  The balance of $26 Million is to be deposited in same Escrow Account within 90 days after the Preliminary Approval is entered.
  • Documents indicate Settlement accounts will be funded by National Milk Producers, although member Co-ops Dairy Farmers of America (noted as successor to Dairylea by merger), Land O’Lakes, and AgriMark) are named in the court documents.
  • Attorneys Fees & Expenses to be deducted:  It is expected that approximately $17,333.333 million (1/3 of the Settlement Amount, along with a maximum of $2.4 million in expenses, shall be paid to plaintiffs’ counsel.  A maximum of $2 million is allowed for administration expenses.  Therefore, there is a total of $21.7 million to be deducted from the Settlement Amount of $52 Million, leaving approximately $30.3 million for distribution among class members.

Where will the Money to Fund the Settlement Money Come From?

The Settlement Agreement, as noted above, states that NMPF will fund the Settlement Accounts.  A valid question is “How will that $52 Million be replaced in the NMPF accounts?”  It is possible there could be an insurance policy that may cover this.  It is possible that NMPF may ask the defendant member co-ops for money to help fund the costs, but that would be between NMPF and the Boards of Directors of the Defendant Co-ops.  Producers should ask questions in their individual organizations if they are concerned about this matter

It is best to read the entire Settlement Agreement, along with other official court documents, which can provide thorough understanding.

Who are the class members eligible to file for damages?

CONSUMERS are Claimants:  Those consumers eligible for an estimated $30 damages/each are people who live in 15 states scattered over the country, plus the District of Columbia.   The final dollar amount will be determined by number of those who file claims Claims by Jan. 31, 2017.  The ‘Notice of Settlement’,  3 pages long, is the official court document which is the best reference, and is written per standards dictated by Federal Court Rules.  This map, which illustrates the states eligible to receive settlement monies, was downloaded from the boughtmilk.com website, which contains links to several pertinent court documents.

00_nmpf_settlement_states_f

BACKGROUND: 

The Lawsuit was filed in 2014 challenging CWT activity which began in 2003.  The suit was originally filed by several plaintiffs.  At least some or all of the individuals are associated with a group called Compassion over Killing.  Their Mission statement is:  “Working to end animal abuse since 1995, Compassion Over Killing exposes cruelty to farmed animals and promotes vegetarian eating as a way to build a kinder world.”  An article gives their perspective at the time of the filing.

And for those who want to know the many items that have been vetted, reviewed, and discussed in the course of the litigation, go back to the beginning, and read the “Complaint” (legal term), which set in motion the course of action.  This 52-pg. document is written by the plaintiffs, and was filed with the court in December of 2014.

PRINCIPLES and LOCATIONS: 

  •  Plaintiffs law firm, Hagens, Berman, Sobol, Shapiro LLP is based in Seattle, Washington and Berkely, California.
  • The case has been heard in United States District Court, Northern District of California, Oakland Division. The Honorable Jeffrey S. White is the District Judge who has presided over the litigation. As such, he signed off on the Class Certification Order.
  • Court Documents name the defendants who include National Milk Producers Federation and member co-ops DFA, Land O’ Lakes, and AgriMark. Their legal teams are based in several states in the Eastern United States.

Should the Defendants have settled?

 This is a question which only those intimately involved – and who are well versed in both class action law and federal court case law –  are qualified to answer.  There would have been a far greater financial risk had the case gone on to trial, along with significant additional legal expenses. Millions of dollars, and the risks of being liable for even hundreds of millions of dollars, quickly add up in all class action suits.

RECISSION? APPEAL?  Can the Settlement be Invalidated?

In the Settlement Agreement, there are a few clauses which refer to “Recission,” which describe what will happen  if the Settlement Agreement is appealed, or some other events which could void the agreeement.  It is far too early to predict if such actions will take place, but due to the fact they are mentioned in this agreement,  they can always occur.  The lengthy settlement process in the Northeast Milk Litigation is an example of ‘anything can happen’ in a court of law.

 BIG PICTURE QUESTIONS are raised about long-term CO-OP IMMUNITIES:

  • In general, the class action lawsuit challenged CWT as a vehicle for price-fixing and as a violation of antitrust. Due to the stature of all of the parties involved in developing the CWT, along with the fact a decade passed from the time CWT was instituted and before this suit was filed, it is difficult to understand the impact of the allegations in this suit at this time.
  • The CWT was initiated in 2003, and this suit was filed in 2014. The CWT was well publicized, and legal teams would have had significant input into its design. Why was the CWT not challenged legally at its inception?
  • Did those who designed the CWT miss something at the time, or have times changed and events in the decade since diluted the abilities of Capper-Volsted, the Clayton Act, and how they relate to the Sherman Act?

Questions going forward for all Agriculture Co-ops:

  • Will more lawsuits of this nature be initiated by AR groups? How will we in agriculture get prepared for them?
  • What other kinds of challenges will Capper-Volsted, the Clayton Act, and the Sherman Act have to withstand going forward from any other type of consumer group?
  • As will all big picture events occurring in agriculture today, this settlement could have implications far beyond a $52 Million Dollar Settlement. Only time will tell.

UPDATE –

A Bloomberg writer has posted this article on Sept. 8.  In my opinion, radical wording in the headline which is very shortsighted and shows a lack of knowledge and research into the program’s early days.    This is another example of how words can harm a challenged industry of great people mostly trying to maintain their family farms, which are a treasure to them.   We in agriculture have got to figure out why folks think so little of us, and farms that do feed a world are taken so much for granted. .

The Huffington Post has posted this article.

What’s Missing: 2008-2010 Dairy Crisis saw farm prices down the drain, and Fast Food Dollars and Taxes were generated by the hamburger industry

One item left out of the discussion of any ‘big media’ report is that if the program were designed to raise prices, then the years of 2008-2010 saw some of the worst milk prices in history as paid to farmers.  Many farmers were forced to exit the business in those years, and if they didn’t exit, lost many years of equity. However, if any of those numbers were brought up during the course of the suit’s activity, then a thorough study of the transcripts is required.

And then, there’s no doubt that the slaughtered cows, which were slaughtered by elective choice of the owners, many who may have been facing financial walls, went into the fast-food industry as hamburger.  Event the HuffPo article admits that.  However, what is left out is the amount of income this generated for the fast food industry, along with the tax dollars generated.

This story continues to evolve, and many questions remain.

#NationalIceCreamDay: Big Orange Spoonfuls Churned by Cruze Farm & Mayfield Dairy

/ milksheds / Leave a comment

1345_1294_Tn_Ice_Cream_Day_Farms_F

National Ice Cream Day (July 17th) has been served up with a spoonful (well, several spoonfuls) of local farm dairyliciousness !

In East Tennessee, in the very heart of Big Orange Country, ice-cream lovers are lucky to have many great flavors of ice cream available, which are produced using milk from local dairy farms.  Those many flavors are found in two different commercially available brands. Both brands, Cruze Farm, and Mayfield, are popular and iconic in their own right. And both brands support local economies all the way from cow-to-consumer!

Cruze Farm is a single farm which has elected to pursue the difficult path of being a single producer-handler.  They market several types of fluid milk, and are especially known for their buttermilk.  With a very memorable branding program featuring stylish milkmaids clad in gingham, Cruze Farm has become an East Tennessee  and southeast favorite over the past 25-or-so years. They recently opened a seasonal pop-up-shop near Market Square, a food hot-spot, in downtown Knoxville, TN.

Mayfield is a beloved commercial brand founded over a century ago in Athens, TN, and still based there, now under the Dean Foods umbrella.  Mayfield ice cream can be found in several states in the southeast and now expanding it’s geographic reach up the Eastern seaboard.

Due to its market scope, Mayfield supports many regional farms in the southeast, in turn contributing to local agribusiness and economies in the areas where those farms and cows are located. Dairy cows eat lots of feed, formulated and balanced in many different ways, with many different grains and forages.  Mayfield products, and the consumers who buy them, also support many area grain and hay farms who supply those cows with feedstuffs.  This is one way that a ‘regional food system’ which supports medium-sized family farms, continues to be sustainable.

On National Ice Cream Day, it seemed a natural fit to visit the new Cruze Ice Cream Shop. Many East Tennessee minds apparently were thinking alike, as a line out the door signaled the ice cream boutique’s popularity!

1270_Cruze_Store_Lines_Milksheds_Ice_Cream_Day_F

Knoxville Food Tours, which has hosted nearly 6500 guests in over 700 tours, had a lively group ending their culinary tour of the downtown area with cones and cups!  We talked about how #NationalIceCreamDay is really a ‘thing!’  Did you know #JulyIceCreamMonth and Ice Cream Day were official declarations of Ronald Reagan?

1284_Cruze_Knoxville_Food_Tours_Milksheds_AgV_F

A member of the group, Katrina, also professed her love for ice cream’s parent – Milk!

1285_Milk_AgriVoice_Milksheds_Knoxville_F

A group of folks who struck up a conversation as they made their way through line discovered they had several connections and common acquaintances through the UT College of Agriculture. (A couple already knew each other.)   It made for a great afternoon to spend time catching a sidewalk breeze and relishing the tasty treats!  From chocolate to strawberry to peach, a smorgasbord of flavors filled the cups and cones.

1299_Cruze_Sidewalk_Ice_Cream_Milksheds_F

And anyone who knows Emily already knew what flavor she was savoring – Coffee!

1295_Emily_Milksheds_Ice_Cream_Day_F

National Ice Cream Day in Big Orange Country could only end with a nightcap of Orange Ice Cream, this time courtesy of Mayfield Dairy, even it it was accented with a bit of pineapple.

1345_Mayfield_Ice_Cream_Orange_AgV

Local Cows.  Community.  Conversation.  Local Farms. Ice Cream.  Local Economies.

National Ice Cream Day in Tennessee.  That’s how we ‘bowl!’

1345_1294_Tn_Ice_Cream_Day_Farms_F

 

Milksheds 101 – A Primer about a “Cow”mplicated Topic

/ milksheds / 1 Comment

 

311_Milkshed_AgriVoice_Intro_F

A MILKSHED – just exactly what is it?

For the purposes of  this blog, a ‘milkshed’ is all of the factors and people related to bringing milk to a consumer.  Those factors include:

  1. Cows, mainly, but sometimes other mammals such as goats, sheep, water buffalo, or camels.  In my view, nut-based and plant-based beverages are not part of a true milkshed; they belong in a faux-milkshed.  However, I will freely acknowledge that sometimes allergies to mammalian milks necessitate the existence of the milk-alternative beverages.
  2. Farms and crops and feed for cows (Some farms have cows, some farms grow feed for others who have the cows.  Sometimes a farm does all of that, but often not in today’s world.)
  3. Farmers (farm families, farm managers, and farm workers)
  4. Agribusiness, livestock supply, farm supply companies, and veterinarians: those who provide products and services that farms need to stay in business
  5. Milk Handlers (milk brokers, co-ops, or farm owners /individuals) – those responsible for selling milk from farms to milk plants
  6. Transport systems – responsible for delivery of milk from farm to plant – includes trucking companies, and those who drive the trucks, those who service those trucks
  7. Milk processing plants – safety labs, quality control labs,  equipment, assembly lines, and some very expensive and very sanitary equipment.
  8. Distribution networks – from the milk plant to retail outlets such as stores, restaurants, or ice cream trucks!  Sometimes, depending on shelf-life of the product, warehouses and then to retailers or restaurants.
  9. Retailers – Groceries, restaurants, fast-food chains, convenience stores, caterers, ice cream parlors, cheese-mongerers, etc.
  10. REGULATIONS!  And again REGULATIONS!  Did you know the dairy industry is one of the most heavily regulated industries in the world?  At every step of the way, from farmer to retailer, there are volumes and volumes of local, state, federal, and in some cases, international regulations.
  11. LAWS and legal events:  Along with regulations, many local, state,  federal, and again, international laws touch that tall, cold, glass of milk.
  12. The consumer- the person who drinks a glass of milk or kefir, enjoys yogurt for breakfast, or eats a big bowl of ice cream as part of a celebration.  THANK YOU, to each and every consumer and afficionado of milk everywhere!

At every level of that milkshed – there are people, and jobs.  And those who supply  equipment and services for every level of the dozen steps of a milkshed above. (Really, there may be way more than a dozen – this is just how it worked out at this writing.)  Some of those people know only one level or niche of a milkshed, while others know and have experienced several aspects of a milkshed. Those who have ‘been there and done it’ are the ones I trust the most with accurate information about a complicated industry.

There are those who milk the cows, the farm families who live and manage the farm business (and it is a business), the milk fieldmen and fieldwomen who connect the milk plant or milk company and their quality standards with the farm,  writers and media folks who communicate to the public and within the different levels of the milkshed about industry events, farm kids, youth, college students and professors, and business executives – and more! Well, you get the picture – at least the start.

100 years ago, a milkshed was often as close as the backyard shed when the family cow was kept in a lot not far from the back door. Almost every residence had one cow.  If they didn’t have a cow, there was a nearby creamery, but the consumer pretty much knew where the cows and farms were that supplied that creamery.  Today, we live in a national or global milkshed that runs from coast-to-coast, and then around the world.

I am based in East Tennessee, but travel across the Southeast, so that is the local/regional milkshed with which I’m most familiar. However, my working knowledge and travel expands to a much wider base, from coast-to-coast, and border-to-border, and even ‘across the pond’ just a bit.

Those are the basics, but the reality is a Milkshed is much more complicated and intertwined than the very simplified explanation you see on this page.  Feel free to ask questions about anything milk!  Many of the answers I will know, some I will have to bring others in on, and some questions – well, answers may still be needed, just as answers are still needed for a lot of life issues.

I hope you enjoy the journey with me!

4_Milk_Glass_Milksheds_AgriVoice_F

SE Milk Litigation: Appeal Deadline Expires, Dean Foods Payment 3 may be processed

/ milksheds / Leave a comment

Sun Photo by Phil GentryFederal Court House

The wait is apparently over for Dean Payment #3 per the Dean Foods/SMA Settlement Agreement in the Southeast Milk Litigation to be processed.

The deadline to file an Appeal to Judge Ronnie Greer’s October 16th, 2014 “Order Authorizing the Third Distribution of Dean Settlement Funds” has now expired. In this instance, an Appeal would have been filed with the US Court of Appeals for the 6th Circuit, located in Cincinnati, Ohio.

Unless official filing documents are received via the United States Postal Service at the Sixth Circuit offices with an appropriate postmark, payments can now be processed and mailed to producers.
Per Federal Court rules, there is a 30-day time frame in which an Appeal an Order may be filed, which may occur when Motions are filed prior to the entry of an Order.

According to court documents, a dairy farmer, who had become a board member of the SMA board following the Dean/SMA Settlement which became final in June of 2012, but prior to the DFA Settlement Agreement claims deadline of March 31,2013, received the first Dean Foods Settlement payment, but was denied the DFA Settlement Payment and Dean Payment #2.

This producer had filed a Motion asking the court to reinstate his eligibility for settlement payments, given the timing of his placement on the SMA Board. A clause was in all of the Settlement Agreements declaring Board Members of all defendant Co-ops to be ineligible for payments, but this specific instance of when a board position was filled was not addressed in the original documents, and so the Motion to reinstate was filed.

Producers who filed claims directly with Rust Consulting may expect that they will receive checks within a couple of weeks. Producers who used third-party filers may take a bit longer to receive their checks.
The amount in this cycle of checks will be similar to amounts producers received in the Dean Payment 2, paid to class members in September of 2013.

As far as future payments, producers can expect to receive their monies. Thus far, the defendants have been very responsible in depositing their monies in escrow accounts by the deadlines agreed upon in the original Settlement Agreements. This process is diligently monitored by the Court.

However, each payment cycle is always subject to various court proceedings, so the timing of receipts of payments by producers may vary. Two additional Dean Settlement Payments are set to be filed, one in 2015 and one in 2016. The possibility of an additional DFA payment remains if specified utilization rates are not reached by certain deadlines.

Class members should be aware that until the final payments are made, this is an ongoing legal matter, with a number of legal filings subject to changing subsequent payment schedules.

Producers will be notified of additional developments in this historic Class Action litigation when they occur. For a history of the case, including many official court documents, interested parties may visit http://www.southeastdairyclass.com.

Litigations are just one portion of the worldwide milkshed.

FARMLAND: Part 2(b) – ‘Somewhere’ Farms exist in NYC’s Concrete Canyons

/ milksheds / Leave a comment

FARMLAND, the film, was about to come to New York City in the evening, but in fact ‘farmland’ already had.

Even in those tall concrete canyons collectively called the Big Apple, Farmland is everywhere. It is found on every street corner, in every high rise, on every fashion runway, in every sidewalk food stand, on every morning show. How so, one might ask?

All a person has to do is look beyond the visible, to the invisible farms that are found in every cop’s doughnut to the most elegant gourmet dinner to the cotton in designer dresses to see the foundation of the hustle and bustle of city life. Much as blood courses through the veins to keep a human body alive, farmland courses through urban byways everywhere to provide their lifeblood.

The sad part is – most city-dwellers seem to never comprehend that fact. The two previous blog posts, Part 1 here, and Part 2 here have begun to connect those dots; read on to connect a few more.

Compelled to visit the World Trade Center site (to be featured in a later post), after breakfast I headed down the street towards the Financial District. I didn’t have to walk far before seeing Farmland on (west) Broadway, in the form of a bucolic pasture scene on a FreshDirect truck. That company’s 2,500+ food-delivery jobs are dependent on farmland – somewhere.

FoodFrmFrsDrctDlv

Around the corner and down a few blocks, to America’s commerce center.

FoodFrmWllStrt

43 companies – ADM, Dean Foods, Tyson, and Pilgrim’s Pride among them – are directly categorized as ‘food’ companies which are traded on the NYSE. In addition, there is an unknown amount of other companies, such as Martha Stewart Omnimedia, Walmart, and Kroger, who include food sales or food methodology in their portfolios, that are valued or devalued daily in the nation’s most prestigious exchange.

And then, the BULL!

FoodFrmBullFb

While some think this global icon is merely a signatory for an active, expanding market, there is real reason for the symbolism: The food companies traded on Wall Street account for TRILLION$ of BIG DOLLAR$, and those Dollar$ are dependent on Farmland – somewhere. The farmland may be in Brazil, or Europe, or New Zealand, or coffee plantations in the tropics ($tarbuck$, anyone?). Best thing about this Bull? In the eyes of a farmer, he’s a low maintenance kind of livestock, since he requires no actual feed!

Onto the subway for a first time, and a few minutes later I arrive at Grand Central Station. Yep, Farmland here, too, and quite colorful!

FoodFrmGrCntrMrktFb

Why not a Farmer’s Market in one of the nation’s busiest rail hubs? Workers from the city grabbing something fresh for supper as they catch a train on their evening ride really makes a lot of sense when you think about it. But what about the food sold in the Market? Could the tomatoes be some of those grown by one of my Tennessee neighbors? (We know they go to NYC through a broker).

At any given time of year, the lovely produce could come from any part of the globe, all starting on Farmland. Some will be traceable to the point of origin, some will not. Some will be grown in the States using plant protection agents that are monitored and approved by the FDA and the EPA, while some will be grown in countries with food safety standards not nearly as stringent as ours. Some will be organic, and some local (NY, CT, PA, or NE). All will require the fertile soil that is Farmland.

The Grand Central Dairy Case featured some wonderful regional milks:

FoodFrmGrCntrMktMlk2Fb

One brand, Ronnybrook’s “Beyond Organic,” is processed on the farm where the cows live – a farmstead milk! This is about as local and fresh as you’ll find in New York City. I ‘sort of’ already knew the farm through registered Holstein circles. Hudson Valley Fresh is processed by a small family farm cooperative. One of the ten member-farms of the co-op, Dutch-Hollow, has just been announced to be the 2014 Dairy of Distinction by National Dairy Shrine!

On for a special lunch – I was meeting a treasured ‘long-lost’ Tennessee cousin, who works in New York City, at Fonda Del Sol, on Vanderbilt Avenue. Beef – from a farm and ranch somewhere – was on the menu, at a ‘Mad-Men’ kind of restaurant (Charles’ description, not mine!).

FrmlndFrtsLbrsFieldjpg

Hanger steak was plated, and what a treat! This cut has been promoted by farmer’s organizations such as National Cattlemen’s and Beef Industry Councils across the country. And since Tennessee is one of the nation’s leading cow-calf operations, this delicious bit of protein could have started on a farm in my neighborhood! Farmland – close to home – contributing to the New York Food economy. With beef quality and food safety measures all along the way, this delicious morsel could be eaten with no fear!

Time to head back to Tribeca to get ready for the purpose of the trip: Farmland, the Film. And for the umpteenth time, another coincidence. On top of the Tribeca Film building where the film was to be screened – well, see the sign:

FarmFoodBgChFF

Several years ago, I had the privilege to help launch a farmstead cheese operation. I had to wonder what launching would occur from this trip. No doubt, the previous 24 hours had set the stage for the screening.

New York City is not the only metropolis that has Farmland – somewhere – that runs through concrete canyons. They all do, but do their residents know how close they are, or how dependent they are – on Farmland?

Next up: a post about the screening event itself, and my impressions of Farmland, the Film.

SE Milk Litigation: Court Approves Settlement Funds to be Paid to Farmers

/ milksheds / Leave a comment

Image(Greeneville, TN)  A simple 4-page Court Order, a culmination point for one of the most complex farm and food class action litigations in United States history, will return $85 Million dollars to Southeast dairy farm communities in the coming weeks.

 

In an Order entered on December 11, 2013, US District Judge J. Ronnie Greer approved the disbursement of the DFA Settlement Funds in the Southeast Milk Litigation, following a Motion filed by Plaintiff’s Attorneys for the Dairy Farmer Class on November 26, 2013.   The litigation is based in US District Court, Greeneville Division, Eastern District of Tennessee, in the Sixth Federal Circuit.

 

With that Order, checks can now be cut and distributed to 6,086 class members who will receive an average of $14,072.31 each.  However, if farmers elected to use third-party representation, those farmers will receive anywhere from 15% to 30% less, depending on the percentage of fees charged by the third-party filer they elected to use.   

 

Dairy Farmers of America, Inc., (DFA) and related entities National Dairy Holdings, LP (NDH), Dairy Marketing Services, LLC (DMS), Mid-Am Capital, LLC, and Gary Hanman entered into a Settlement Agreement in the class action lawsuit on January 17, 2013, and which was filed with the Court on January 21, 2013.   

 

They were the last remaining defendants to settle in the complex litigation, originally filed in July of 2007, a tenure of six and one-half years. Other defendants Dean Foods, Southern Marketing Agency (SMA), and James Baird finalized their settlement agreements in February of 2012, with final approval by the Court in June of 2012.  In the language of all settlements, none of the defendants admitted guilt to the allegations of antitrust and price-fixing for the purpose of depressing prices paid to dairy farmers in Federal Milk Marketing Orders 5 and 7, respectively the Appalachian and Southeast orders.

 

The settlement agreement for each defendant varies in the terms of the total monetary payments, the terms, timing, and length of the payout schedules, and the conduct changes in the marketplace which will take place over several years.  The court retains enforcement and jurisdiction of the Settlement agreements until the last activities per the agreements are expected to occur by the year 2016.

 

The current DFA Gross Settlement Fund totaled $140 Million Dollars, equal to the Dean Settlement Amount.  However, the Dean Food Settlement Funds will be distributed over annual payments until the fall of 2016, while DFA elected to borrow funds and make a one-time payment to settle the lawsuit.  Honoring the Settlement Agreement, DFA placed the $140 Million in an escrow account in February, 2013.  Any interest accrued by the escrow fund is accounted for in the distribution.

 

In keeping with the normal standards of Federal Class Action lawsuits of this nature, attorneys’ fees and expenses (thirty-three and one-third percent contingency), claims administrator expenses, certain miscellaneous expenses, and payments to named plaintiffs were deducted from the gross settlement fund to result in the net settlement fund of $85,644,095.34.

 

In accordance with Class Action procedure, a Fairness Hearing for the Plaintiffs/Farmer Class to make comments was held on April 3, 2013, with Final Approval of the DFA Settlement entered on the Court’s file on May 17, 2013.  The Order of Approval had to survive an appeals time frame, and the Claims Administrator had to satisfy the Court’s requirements for meticulous audit and accounting procedures  before the funds could be paid to class members.

 

Through the spring, summer, and fall, Claims Administrator Rust Consulting received claims forms, and conducted audits of the claims submitted.

 

There is a good possibility, but not a guarantee, that Class members will receive these checks before the end of the year.    With the first Dean Foods/SMA Settlement payment issued in January, the  Order for Disbursement was filed on January 8, and many farmers received checks beginning two weeks later, on January 22.  With the second Dean payment, there was a month before checks were received following the Order.

 

In a separate portion of the DFA & Related Settlement Agreements, there were approximately 50 documents, a portion of the many confidential documents under seal during the course of the litigation, which the defendants agreed to finally open to the public.  Many dairy industry stakeholders across the country have felt the information contained in those documents was as important as the monetary settlements.  Those documents have yet to be opened, and it is unknown when they will be.

 

Too, there were terms in the Settlement Agreement concerning the public announcement of salaries of key DFA management and compensation for board members to be announced.  Those announcements depended on actions of the applicable councils and committees within the DFA membership itself hinging on annual meeting dates.   It is anticipated those actions should be resolved during the winter and spring of 2014.

 

Appropriate court documents and additional information should be appearing on the Litigation website,

www.southeastdairyclass.com, in the coming days.