Impact of COVID-19 on Agriculture

AFBF Standing Up for Dairy Farmers

News / Newsline December 7, 2020

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The American Farm Bureau Federation says Dean Foods is targeting dairy farmers through the food and beverage company’s bankruptcy proceedings. Micheal Clements shares what AFBF is doing to stop those efforts.

Clements: The American Farm Bureau Federation is standing up for dairy farmers targeted by Dean Foods. The company is undergoing bankruptcy proceedings and threatening legal action against dairy farmers as part of the process, according to Travis Cushman, AFBF senior counsel for public policy.

Cushman: Bankruptcy law allows a debtor to go after payments that were made within the three months prior to bankruptcy that were made on a preferred basis. It appears that most, if not all of these farmers were conducting business in the ordinary course and would therefor be exempt from any claw back from Dean Foods. And so, what Dean Foods has done is they have sent letters to we believe close to 500 farmers demanding that these farmers repay all monies received by Dean within the three months prior to when bankruptcy was declared.

Clements: Cushman calls the effort a predatory shakedown regarding milk payments already highly regulated by the federal government.

Cushman: The letters essentially try to extort tens of thousands of dollars from folks that likely have a complete defense against these claims. So, we decided to stand up for farmers and demand that this law firm retract all these letters. And if any farmer has paid any money, the law firm and Dean Foods pay back that money they should not have had to pay in the first place.

Clements: AFBF sent a letter to the law firm managing the Dean Foods estate calling for an immediate reversal and threatening potential legal action if the firm fails to withdraw the letters sent to farmers.

Cushman: Many of the producers who received these letters are independent farmers who are struggling through a multi-year downturn in milk prices and a difficult economic environment with the COVID-19 pandemic that increased milk price volatility. These letters have put producers who are already at the brink in an impossible position, either pay the amounts demanded or incur the costs of legal council to defend against the debtor allegations. That is simply unacceptable.

Clements: Micheal Clements, Washington.

Read the full letter here

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