Lou Dobbs Tonight Report on DFA 

 CNN’s Lou Dobbs Tonight business/financial news report on Wednesday, August 24 aired a news story about angry dairy producers in the Northeast whose milk markets have been taken over by Dairy Marketing Services (a DFA joint venture). Dobbs’ film crew was at a Pennsylvania dairy farm interviewing producers last Friday morning, August 19.

Following is the transcript from Lou Dobbs’ web site www.loudobbs.com:

DOBBS: Tonight, the Justice Department is investigating the group that controls one-third of the dairy production in this country. The Dairy Farmers of America is a cooperative accused of building its control of the milk market into an outright monopoly. Its critics say the group has crippled American dairy farmers and created yet another trade deficit for this country in dairy products.

Bill Tucker reports from Allenport, Pennsylvania.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): It's just past dawn and the cows are being led into the milking barn on Hal Drick's farm. Drick, one of the fading breed, an independent milk producer. Pressure is mounting on him to sign with Dairy Marketing Services, a company associated with the Dairy Farmers of America, the nation's largest dairy co-op, with more than 14,000 member farms. Drick says if he doesn't sign, there will be nowhere he can sell his milk.

HAL DRICK, DAIRY FARMER: If things don't change from what they are now, it's going to be a pretty sad picture for the farmer.

TUCKER: In 1970, there were roughly 650,000 dairy farms. Today, those numbers have dwindled to less than 80,000. And since 1995, America has been a net importer of dairy products. Last year, we imported the equivalent of nearly five billion pounds of milk.

Dairy Farmers of America supports import programs, along with paying farmers, to kill domestic dairy livestock. Incredibly, DFA is a co-op, meaning that it is owned by its members. A growing number of farmers, including this group that we met with in Pennsylvania, say DFA is at odds with their interests.

JOHN BUNTING, DAIRY FARMER: They want to change the definition of fluid milk, and they want to change the definition to include milk protein concentrates, which are primarily an imported product from all over the world. So I don't think the DFA has either the consumer or the farmer in mind.

BILL HART, DAIRY FARMER: Your fuel's going up, your electric's going up. Everything else goes up for us, but we don't get any more for our milk than we did two months ago or whenever.

TUCKER: Which doesn't explain the disparity between what farmers are paid for their milk and the dramatically higher prices the consumers pay. The Justice Department has been investigating DFA for over a year. It won't comment on the investigation, nor will DFA, except to say they are cooperating.

RANDY MOONEY, DAIRY FARMERS OF AMERICA: We have asked our staff to fully cooperate with the Justice Department, provide them every bit of the information that they request and they want.

TUCKER (on camera): What's happening here in the farmland of America is strikingly similar to what we've seen in manufacturing, the small American business losing out to the cheaper foreign imports. This time, it is our nation's food supply that is at risk.

(voice-over): It comes down to this simple truth.

UNIDENTIFIED FEMALE: Any nation that cannot feed itself is not free. Simple as that. If we want freedom in this country, we've got to have a food supply.

TUCKER: Bill Tucker, CNN, Elimsport, Pennsylvania.

(END VIDEOTAPE)

DOBBS: A gallon of milk cost significantly more now than just a couple of years ago. The average retail price for a gallon of two percent milk, $2.79 two years ago; now, $3.17 a gallon. So far this year, the price of milk has risen to $3.21. By comparison, we found that a gallon a bottle of water that cost just half that. It's $1.60 a gallon. That's for water.