Giving Compass' Take:

• Jessica Fu reports that an effort to "retire" milk cows has resulted in a $220 million price-fixing settlement. 

• How can funders help dairy farmers cope with milk price inconsistency? 

• Learn about the mental health consequences of the milk price decline on farmers. 

America’s biggest dairy cooperatives agreed to pay $220 million to settle a yearslong, class action price-fixing dispute with retailers. Filed in 2013, the case alleged that the co-ops, which supply up to 70 percent of milk in the U.S., conspired to raise prices by paying farmers to prematurely slaughter cows and thereby restrict supply. The settlement does not include any admission of wrongdoing.

In 2003, an industry trade group called the National Milk Producers Federation (NMPF) launched a herd retirement program that encouraged producers to shift their cows from dairy to beef production. It requested that farmers to submit bids—dollar values for which they would be willing to slaughter their herds—and then accordingly paid accepted bidders to do so. Throughout the duration of the program, which ran from 2003 to 2010, more than 500,000 cows and 2,802 dairy farms were pulled from production, equivalent to a loss of 9.67 billion pounds of raw milk supply, according to a screenshot of the program’s website included in the retailer complaint.

For the past two decades, the dairy industry has faced significant turmoil due to issues including declining milk consumption, consolidation, and volatile milk prices that have been known to dip below the cost of production. NMPF instituted the herd retirement program explicitly to stabilize those finicky milk prices—an effort to curb industry-wide overproduction that “help[ed] to keep supply and demand in better alignment,” according to a 2016 NMPF document. Prices did, in fact, rise as a result of the herd retirement program, according to a handful of studies. The extent to which the program buoyed the entire industry, however, is questionable: To this day, milk prices remain an ongoing concern for many producers.

Read the full article about price-fixing in the dairy industry by Jessica Fu at The New Food Economy.