Cooperatives not a Department of Justice target

Hoard's Dairyman: 

Cooperatives not a Department of Justice target

Date: 
Mon, 06/28/2010

Testimony at the third of five USDA—Department of Justice workshops kicked off Friday morning, June 25, in Madison, Wis. These workshops are designed to investigate competition and regulatory issues within agriculture. When United States Department of Agriculture (USDA) and the Department of Justice (DOJ) announced these events, the impression was given that cooperatives and the Capper-Volstead Act would come under fire. We detailed those concerns on our May 10, 2010, editorial page. Early on during Fridays workshop, USDA Secretary Tom Vilsack and Assistant Attorney General for the Justice Department's Antitrust Division, Christine Varney both went to great lengths to put those concerns to rest.



"We don't have a hidden agenda or a stated desire to reformulate the law," said Vilsack when discussing the Capper-Volstead Act. "What this is about is creating a fair marketplace," noted Vilsack when talking about the coalition formed between the USDA and DOJ. 



Collectively, nearly every dairy producer who gave testimony during the event breathed a collective sigh of relief that neither the USDA nor DOJ was looking at Capper-Volstead. Those thoughts were repeatedly echoed in comments given throughout the day.



During the event, comments were also given by U.S. Senators Kohl and Feingold, both Democrats from Wisconsin, along with other elected officials. Feingold asked the rhetorical question, "What happened between the farm and consumer to cause such a pricing gap?" During producer testimony that followed, the same theme ensued . . . farmers discussed reduced share of the retail dollar, lack of market transparency, and lack of market power in reference for the need for cooperatives.



"We are hearing a consistency of message," said Secretary Vilsack in a press conference that followed. "We have not always heard that in the past. That message is consistent across farm size. There are producers large and small who are feeling squeezed." 



During testimony, much discussion took place on the thinly traded dairy markets on the CME (Chicago Mercantile Exchange). When asked about that matter during a press conference, Assistant Attorney General Varney said, "I am fairly certain there will be a USDA-DOJ conversation about the CME. Whenever you have a market that thinly traded, there can be a problem."