Dairy farmers are pressing federal antitrust regulators to investigate why large food companies are making hefty profits while farmers are going broke.

The average dairy farm in the state lost about $100 per cow per month this summer, according to the Wisconsin Farm Bureau Federation.

With more than 1.25 million cows in the state, it means the industry is losing roughly $4 million a day.

That's largely because farmers, who received about $20 for every 100 pounds of milk they produced in 2008, have seen the price cut in half this year. In layperson's terms, 100 pounds of milk equals nearly 12 gallons.

Some farmers have cashed out their farm equity and savings just to buy cattle feed and pay their utility bills. Entire herds have been slaughtered as part of a national program meant to reduce milk supplies and increase the amount that farmers receive in their milk checks.

"It gets a little harder every month," said Kevin Griswold, a dairy farmer from Ixonia.

At the same time that farmers are struggling, food processors have benefited from a glut of milk and the lower prices paid to farmers.

Dean Foods Co., one of the industry's largest players, reported a 31% profit increase for its quarter that ended June 30. The company earned $64.1 million on sales of $2.7 billion in the quarter and said it was on track to deliver very strong results for the full year.

Historically low dairy commodity prices have helped boost profits, Dean Foods said in its quarterly report.

Farmers receive about $1 from every gallon of milk sold in the grocery store. The rest of the retail price covers processing and handling costs and goes toward the profits of processors and store owners.

Fewer processors and dairy industry consolidation has led to a breakdown in competition, resulting in farmers not getting a fair share of the retail food dollar, according to some involved in agriculture for decades.

"No matter what you do, even if you give 110% every day on your farm from sun up to sun down, at the end of that day you will not have earned enough to pay your bills. It doesn't get any more demoralizing than that," said Joel Greeno, a farmer from Kendall.

There has always been a gap between what farmers are paid for their milk and what consumers pay for dairy products. But the gap has widened, according to U.S. Sen. Russ Feingold, (D-Wis.).

Farm groups such as the National Family Farm Coalition have urged Feingold to investigate large food companies and dairy cooperatives that sell to the companies.

"Based on our research and conversations with agricultural economists, we believe that one reason for Dean Foods' recent profits may be its ability to exercise monopoly pricing power in many parts of the country," Feingold said in a letter to the Department of Justice's antitrust division.

Feingold said he wants the Justice Department to reconsider the 2001 Dean Foods merger with Suiza Foods that helped make Dean the nation's largest milk processor and distributor. He also wants antitrust regulators to review Dairy Farmers of America, a dairy cooperative that controls about 30% of the nation's milk supply and sells milk to Dean Foods.

"My goal is not to pinpoint a villain. But some of the major players are going to have to be part of the examination," Feingold said in an interview last week.

Dean Foods and Dairy Farmers of America strongly deny any wrongdoing and say they're not responsible for the current farm crisis.

"We are not a monopoly that controls the market. We buy less than 15% of the nation's raw fluid milk supply from only 9,000 of the 58,000 U.S. dairy farmers," Dean Foods said in an e-mail to the Journal Sentinel.

"Since we produce drinking milk, we are paying the highest regulated price under the current system, from 20% to 50% more than what cheese processors pay," the Dallas-based company said.

The worst global recession in 75 years, combined with too much milk production, are at least partly to blame for the dairy crisis.

"I don't see much that would indicate an antitrust issue," said Randy McGinnis, chief operating officer for Dairy Farmers of America's central region that includes Wisconsin.

The Obama administration is scheduling a series of listening sessions in 2010 to hear from farmers on a variety of issues, including market concentration and competition among food processors.

Feingold wants antitrust regulators to review the recent Dean Foods' acquisition of Foremost Farms USA processing plants in Waukesha and De Pere.

The merger "seems to have eliminated virtually all competition for school milk contracts in Eastern Wisconsin," Feingold said in an Aug. 6 letter to Christine Varney, head of the Justice Department's antitrust division.

"This is especially troubling because, as you know, competition for school milk contracts has been a traditional measure of competition in the dairy industry as a whole," Feingold wrote.

Numerous complaints

According to numerous complaints, Feingold said, Dean Foods and Dairy Farmers of America have repeatedly conspired to deny independent farmers and small cooperatives access to milk bottling plants, in order to force them to join Dairy Farmers of America or market products through its affiliates.

Justice Department officials declined to comment on whether there would be an investigation into the dairy industry.

But the antitrust division is aware of the economic upheaval and that farmers were going out of business at a record rate.

"We are very concerned about these developments," Varney said in a Senate hearing in September.

Farm milk prices are set by the government using a complex formula patched together over many decades.

Farmers say consumers ought to be paying much less for dairy products now - given that the prices they receive have tanked.

"The dairy processors have been buying their raw product at a bargain-basement price," said Casey Langan, spokesman for the Wisconsin Farm Bureau Federation.

Stores set prices

But retail stores, not processors, set the final prices that consumers pay.

"We don't have much to do with that at all," said McGinnis with Dairy Farmers of America.

Wisconsin's $26 billion dairy industry is the lifeblood of dozens of communities.

But for now, farmers are bearing the brunt of low commodity prices.

"The money is there. It's just not getting back to the farmer," said Pete Hardin, editor of The Milkweed, a dairy industry publication based in Brooklyn, Wis.