Dairy Farmers of America is closer to getting paid for some of its April milk after the Pennsylvania Milk Marketing Board made four claims against Dean Foods’ milk dealer bonds.
The July 8 claims will cover nonpayment for Pennsylvania milk shipped to Dean plants in April and limited underpayment for milk delivered prior to April, the board said.
Dean failed to pay for the milk as it sold off its assets during bankruptcy proceedings. Dairy Farmers of America bought the largest share of the company’s plants, including those in Pennsylvania.
Required by state law, milk dealer bonds are used to compensate farmers when a buyer fails to pay. A bond covers roughly a month of milk receipts.
The proceedings against Dean Foods mark the second time the Milk Marketing Board has made a bond claim in 20 years.
Last year the agency claimed a bond from Trickling Springs Creamery, a Chambersburg processor that closed as the owner’s Ponzi scheme unraveled.
Multiple bond claims were required in the Dean Foods situation because the company’s subsidiaries in the state had provided separate bonds.
The Pennsylvania attorney general’s office assisted with the Dean Foods bond claims.