A federal court has approved a $50 million settlement with Dairy Farmers of America Inc. (DFA) and Dairy Marketing Services LLC (DMS).  The settlement provides financial payment to certain dairy farmers in the Northeast and results in changes to DFA’s and DMS’s business practices.

This settlement resolves all claims against DFA and DMS in a lawsuit alleging they engaged in anticompetitive conduct within Federal Milk Marketing Order 1. If this settlement is approved, farmers will not be able to sue DFA and DMS, as well as their members, partners and certain related entities, for the claims in the suit or related claims.

If 8,000 dairy farmers file a valid claim, the average payment per farmer is estimated to be $4,000. The payment could be more or less than $4,000 depending on the amount of raw Grade A milk one produced and pooled on Order 1. Farmers must file a claim to get a payment.

The Court in charge of this case still has to decide whether to approve the settlement. Payments will be made if the Court approves the settlement and after any appeals are resolved.

The approved settlement does not include a $30 million settlement agreed to separately by Dean Foods five years ago. The U.S. District Court for the District of Vermont said the $50 million is a “modest recovery” but taken with the Dean Foods ongoing litigation “is not insubstantial.”

DFA and DMS agreed to “change their business practices” including a five-year farmer ombudsperson to advocate for farmers, a seat at the DFA/DMS advisory council to advocate for farmers prices and equity, DFA and DMS agreed to milk testing protocol changes and dispute rules, new farmer notice requirements on adulterated milk report and several other measures.