DFA sued Department of Agriculture Secretary Wes Ward and Arkansas Milk Stabilization Board Chairman Frederic Simon on June 1 in Arkansas federal court, claiming the recently adopted Milk Stabilization Rule imposes an unfair over-market premium on milk producers.

Milk “dealers” – someone who purchases milk within Arkansas for processing or manufacture and further sale – must pay the over-market premium to producers. Cooperatives like the DFA are required to “pass through” the premium to producers, the suit says.

“By requiring such a payment, the Rule directly conflicts with the pervasive federal regulation of the raw milk market, which establishes the method of calculation for the minimum price to be paid by the processor (milk dealer) and the rules and procedures for the payment for raw milk,” the suit says.

“This interference with contract could have severe impacts. To the extent that the State believes that DFA is responsible for making the payments under the Rule to its Arkansas dairy farmer members, DFA may be required to pay those farmers more than DFA would have received for their milk under the federal regulatory program.”