The once-praised Cooperatives Working Together Herd Retirement Program was the subject of a class-action lawsuit settled last week.

The National Milk Producers Federation reached a settlement agreement to end the class-action lawsuit brought by larger retailers and companies who directly purchased butter and cheese from Cooperatives Working Together member cooperatives in First Impressions Salon, Inc., v. National Milk Producers Federation et al (pending in the U.S. District Court for Southern District of Illinois).

Neither NMPF nor any of its member cooperatives admit any wrongdoing as a result of the settlement, in which NMPF pays $220 million in exchange for a release from all claims. Based on antitrust rules that mandate a tripling of any damages, that amount is less than 6% of the damages sought by plaintiffs. The settlement amount will be paid through existing CWT mechanisms, ensuring no disruption to other business operations. NMPF is the sole defendant to be a party to the settlement, but the settlement extinguishes claims against all the defendants.

The herd retirement program ended in 2010 and was administered through NMPF’s Cooperatives Working Together initiative. The settlement will safeguard ongoing efforts to aid U.S. dairy producers, lift a years-long legal cloud and allow NMPF member cooperatives and the current CWT program to move forward with greater legal and fiscal certainty.

“There is no way to sugarcoat a settlement of this size, especially given that the Herd Retirement Program was a well-publicized effort designed to serve dairy producers in difficult times and was praised by two Secretaries of Agriculture as well as leading members of Congress,” said Jim Mulhern, president and CEO of NMPF, the nation’s largest organization representing dairy farmers. “Given the potential damages and the uncertainties surrounding any jury trial, resolving this case eliminates the possibility of a truly crippling outcome.”

The Herd Retirement Program offered dairy farmers financial incentives to market their milking herds for beef. It operated between 2003 to 2010 and was openly lauded by USDA secretaries and congressional agriculture committee chairmen from both parties at the time as an important, appropriate way to help struggling dairy farmers.

NMPF’s decision to enter into this settlement recognized the uncertainties inherent in any jury trial, the very large damages sought by the plaintiffs and the fact that the successful Export Assistance Program is entirely unaffected by the settlement.  In 2018, CWT assistance aided 57% percent of American-type cheese exports, 44% of butter exports, and 39% of whole-milk powder shipments, helping U.S. dairy producers expand trade relationships in an extremely challenging world trade environment.

Source: National Milk Producers Federation, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.