Just the Facts- The Milk Rebate

You may have seen some information circulating on social media and in the news about a ‘milk rebate’. Some of the headlines and information may be confusing, so here are the details to clear up the misinformation.

The situation at the time:

From 2007-2009, America was in the throes of a great recession. During that time home values plummeted, unemployment rose to 10%, and American income levels dropped substantially. (source) Many businesses went under; our company had to make extreme cutbacks to survive some of the lowest milk prices since the 1970’s.

This situation was even more difficult for our dairy farmers. Our dairy farmers were losing AT LEAST $1 per cow, per day. If you had a herd of 1,000 cows that means you were losing $1,000/day or $365,000 for the entire year. Our farmers had to make tough decisions on whether to tough it out and stay in business or to shut down their dairy at the risk of losing more money.

This was the situation nationwide.

Thanks to the Cooperatives Working Together (CWT) program, farmers who were ready to retire from dairy farming could apply for a buyout and if they were accepted, the fund would pay for their cows and they could retire. The cows would then be sold for beef.

The lawsuit:

An animal rights organization thought that this justified a lawsuit, so they filed against National Milk Producers Federation (NMPF) and four dairy co-ops, Dairy Farmers of America, Land O’ Lakes, DairyLea Cooperative, and AgriMark.

The lawsuit had the potential to cost NMPF and the four dairy cooperatives over a BILLION dollars, so NMPF decided to settle for $52 million dollars. This settlement is in no way an admission of guilt, there is nothing to be guilty of as cows are sold for beef on a daily basis, but an acceptance that this was the most reasonable and fiscally responsible course of action given the circumstances. This is not a case of ‘price fixing’ or scheming as the lawsuit alleged. Dairy farmers actually have no control over the retail price of milk (unless they bottle their own) and typically get paid half the amount that retailers charge. (Learn more)

The rebate:

The $52 million dollar settlement is meant to be distributed to residents of fifteen states across the country, including Arizona. The reason only fifteen states are eligible is because those are the states that sold products from the four cooperatives in the lawsuit.

We encourage everyone to visit www.boughtmilk.com, by January 31, to sign up for your rebate. Feel free to show your support of our dairy farmers by buying a couple extra dairy products!