Tuesday, December 30, 2008

Has history repeated itself?

Dairy Farmers of America (DFA) is a large nationally-based farmer-owned milk marketing and dairy product manufacturing cooperative with headquarters in Kansas City, Missouri. Recently, DFA announced that they had reached a settlement with the Commodity Futures Trading Commission along with two former leaders of DFA. The monetary penalty was $12 million US Dollars. This settlement didn't generate a large 'news' presence, with an Associated Press news item circulated in some dairy and local publications in dairy-rich regions of the US and with an article in a Kansas City newspaper.

A US Mid-Atlantic regional publication, Lancaster Farming, had a recent front page article about this settlement and the reaction of their dairy community to the settlement. This article describes the essence of the charge as:

The core of complaints against DFA and the two executives was that they essentially traded against the interests of their own member farmers on the CME, betting on and profiting from declines in prices of dairy commodities traded on the exchange floor."

A little more reading in the article mentions the executives by name and one of those is Gary Hanman, of DFA, who I remember my father mentioning. Please pardon a little bit of history, but I remember my father, Kenny, mentioning Mr. Hanman. My father is a part of this blog's goal.

DFA's history is that it was formed in 1998 by merging four large dairy cooperatives. My father was associated with Mid-American Dairymen (MidAm) which was one of the four cooperatives, and I remember him mentioning political contributions. Another of the four was Associated Milk Producers Inc (AMPI) which gained much noteriety in the 1970's for
contributing money to the campaign fund of President Richard Nixon. The government then changed their stand on milk price supports and the price of milk increased substantially.

Still reading? Here's where history may have repeated itself. You can easily look up recent contributions to political campaigns on the Huffington Post website. If you do a search for Gary Hanman, you find that in the last quarter of '07 and the first quarter of '08, Mr. Hanman made contributions of over $4,000 to prominent Republican campaign organizations.

The article in Lancaster Farming states that the "...
U.S. Justice Department probe of DFA and other players in the U.S. dairy industry that has dragged on for years and apparently been kept bottled up by Bush administration political operatives at the highest levels at Justice. "

I don't know if they are related or not, and I'm not implying that there is a cause and effect. I just find it ironic that once again, former leaders of dairy industry organizations are making political contributions and that a reporter is once again connecting favorable treatment by government officials with a dairy leader who made contributions to the political party in power at the time.

Can't we learn from our mistakes?

Hope that helps.


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