President George Bush July 7, 2006
The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500
Dear President Bush:
As family dairy farmers, we have been extremely frustrated over the last six years since our efforts to bring attention to the rampant corruption in the dairy industry have generally been ignored by government officials and agencies, including those in your Administration.
Our primary concern is price manipulation for dairy commodities at the Chicago Mercantile Exchange (CME). We have sent letters and met with members of the Senate Judiciary Committee, including Senator Arlen Specter (R-PA) and Senator Patrick Leahy (D-VT), as well as the Commodity Futures Trading Commission. We have also corresponded with Senator George Voinovich (R-OH) and Senator Mike DeWine (R-OH) on dairy issues. We met with the CME on April 18, 2005, and held an informational rally in front of their building. A second rally was held in April 2006, to again bring light to this issue.
In the spring of 2004, the Department of Justice began an investigation, along with 23 state Attorney Generals, into dairy commodities price manipulation. Dairy Farmers of America (DFA), Dairy Marketing Services (DMS), Dairylea Cooperative, Dean Foods, and many other businesses and joint ventures of DFA were under investigation.
On October 1, 2005, funding for this investigation was pulled by the US Attorney General’s office. This action precipitated a decline in dairy commodities cash trading at the Chicago Mercantile. Prices for a 40-pound block of cheddar cheese fell from $1.59 1/2 per pound to $1.12 1/4 per pound. This resulted in a drop of $4 per hundredweight in the milk price paid to dairy farmers–a shocking loss of 28 percent.
Dairy farmers in all regions of our nation are suffering from this dramatic loss of income. Escalating costs of fixed inputs, including the skyrocketing fuel prices, have placed dairy farmers everywhere in crisis. The economic fallout from this situation is severely impacting the dairy communities’ support businesses too, as farmers lose the ability to pay for services, supplies, feed, labor, machinery, and mortgages.
Our rural citizens deserve better than this persistent, malicious manipulation of dairy prices, which is causing chaos for the dairy farmers whose social and economic survival is essential for the well-being of this country. Until the powerful dairy processing industry, including the dairy cooperatives that continue to ignore their obligations to their farmer-members, are thoroughly investigated by the Department of Justice, corruption in dairy pricing will continue as the status quo. This grave injustice, the effects of which are suffered by both farmers and consumers, must not continue.
We encourage you to fulfill your duty to our beleaguered family dairy farmers by initiating a thorough investigation into the dairy industry that is completed– not aborted midway. It is time for you to prove, once and for all, that efforts on our behalf are not being stymied by those who profit at our expense.
Shannon M. Nichols