Consolidation in the Dairy Industry

By Sally Fallon Morell

There may be pictures of peacefully grazing cows on the milk cartons, but the dairy business is actually big business, dominated by huge corporations that care only about profit and production, not about quality. In the US, 80 percent of dairy production is controlled by two companies-Parmalat and Suiza. Suiza just doubled in size with the purchase of Dean Foods Co. for about $1.5 billion (that’s billion) in stock and cash-and not a peep from the Justice Department. (Horizon, by the way, producer of “organic” milk, is owned by Suiza. After Suiza’s purchase, the farmers with Horizon contracts took a pay cut-after all, someone has to pay for these mergers.) Headquartered in Dallas, Suiza’s year 2000 income was almost $120 million on $6 billion in sales, and not all of it from milk products. The company also produces milk substitutes such as Second Nature, Mocha Mix and Sun Soy. With the purchase of Dean, the conglomerate will now sell pickles, dressings, dips and powdered products. Suiza entered the dairy business less than eight years ago. Since then, it has made 43 acquisitions-mostly by gobbling up small local dairies. The public remains in the dark because Suiza retains local brand names. The real question is, where does the money come from that allows a newcomer to the field to “get milk” so quickly and on such a large scale?

[include content_id=634]