http://vtdigger.org/2009/09/20/antitrust-division-to-probe-complaints-about-dean-foods%e2%80%99-alleged-monopolistic-practices/?utm_source=rss&utm_medium=rss&utm_campaign=antitrust-division-to-probe-complaints-about-dean-foods%25e2%2580%2599-alleged-monopolistic-practices Independent, investigative news for Vermont Wed, 23 May 2012 13:24:40 +0000 hourly 1 http://vtdigger.org/2009/09/20/antitrust-division-to-probe-complaints-about-dean-foods%e2%80%99-alleged-monopolistic-practices/#comment-8099 Bruce P. Shields Sat, 17 Oct 2009 01:02:51 +0000 http://vtdigger.org/?p=599#comment-8099 Anyone who cares to grasp Leahy's and Sanders's cynical manipulation of these hearings for personal political advantage should call up Dean Foods' Annual Report (10-K) as filed with the SEC. Clear from that is that Dean Foods is attempting to balance between a supply of milk which is very heavily regulated by Mssrs Sanders & Leahy through the legislative process, and a very dynamic and changing marketplace. Our Senators wrongly accuse Dean of being a "monopoly." It is not -- if anything, it is a monopsony. In a monopoly, one seller dominates a market. While Dean is a large player, a 70% share does not even come close to being a monopoly. As the 10-K makes clear, Dean in turn sells almost half its output to three national food chains, anyone of which could drop Dean into second rank overnight by switching suppliers. It is true that Dean is the primary customer for many of the small farmers' cooperatives through which farmers sell their milk -- a monopsony exists where all the small sellers in a region have only one potential market. But Dean only very indirectly sets the price of the milk that it buys. In turn, most farmers have little choice in which cooperative they use for marketing. Farmers, dairy cooperatives, and Dean Foods itself all face a market with somewhat restricted choices. Dean has been very innovative in attempting to expand the market, improve the pricing, and increase utilization of milk and milk products. Sanders' and Leahy's grandstanding will not add one penny to farm income, and could seriously harm milk marketing. Anyone who cares to grasp Leahy’s and Sanders’s cynical manipulation of these hearings for personal political advantage should call up Dean Foods’ Annual Report (10-K) as filed with the SEC. Clear from that is that Dean Foods is attempting to balance between a supply of milk which is very heavily regulated by Mssrs Sanders & Leahy through the legislative process, and a very dynamic and changing marketplace. Our Senators wrongly accuse Dean of being a “monopoly.” It is not — if anything, it is a monopsony. In a monopoly, one seller dominates a market. While Dean is a large player, a 70% share does not even come close to being a monopoly. As the 10-K makes clear, Dean in turn sells almost half its output to three national food chains, anyone of which could drop Dean into second rank overnight by switching suppliers. It is true that Dean is the primary customer for many of the small farmers’ cooperatives through which farmers sell their milk — a monopsony exists where all the small sellers in a region have only one potential market. But Dean only very indirectly sets the price of the milk that it buys. In turn, most farmers have little choice in which cooperative they use for marketing. Farmers, dairy cooperatives, and Dean Foods itself all face a market with somewhat restricted choices. Dean has been very innovative in attempting to expand the market, improve the pricing, and increase utilization of milk and milk products. Sanders’ and Leahy’s grandstanding will not add one penny to farm income, and could seriously harm milk marketing.

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