Dairies to provide refunds to consumers in Arizona

Arizona residents who bought milk or other dairy products at any time since 2003 would be eligible for a cash settlement under a California-based class-action lawsuit against the dairy industry.

Under the settlement, each Arizona resident would get $40 to $70, according to a website lawsuit attorneys have set up. The exact amount, would depend on how many people applied.

Attorneys alleged in court documents in the lawsuit against the National Milk Producers Federation, filed in 2011 that dairy producers conspired in a price-fixing scheme to raise the price of dairy products by killing 500,000 cows and cutting the milk supply. The dairy industry agreed to a $52-million settlement, which was agreed to by the court.

Fifteen states, including Arizona, were part of the lawsuit and United Dairymen of Arizona, a cooperative of over 90 Arizona farms, was part of the National Milk Producers Federation.

''The biggest dairy producers in the country, responsible for almost 70 per cent of the nation's milk, conspired together in a classic price-fixing scheme, forcing higher prices for a basic food item onto honest consumers and families,'' said lead attorney Steve Berman in a September news release announcing a settlement. ''We're pleased that this settlement will return some of what consumers lost due to this massive fraud perpetrated for ill-gotten gains.''

People who had lived in one of the 15 states and had bought a milk product (milk, half and half, cream cheese, sour cream, cottage cheese, yogurt or cream) at a grocery store or other retailer, would be eligible for the compensation. 

Whether the plan to reduce the herd and raise prices worked, is still being debated by economists. Prices might have increased over the short term, but a University of Wisonsin-Madison economist, Robert Cropp, an expert witness for the milk producers, said  that ''farmers were sending their herds to slaughter in a voluntary program when milk prices were low, so the increase to consumers as far as that program was concerned was pretty minimal, almost no impact at all, '' Wisconsin State Journal reported.

However, according to professor Scott Brown of the University of Missouri, ''the evidence is clear that this program has raised the price that all farmers have received since it first began removing cows at the end of 2003.''