Source: POLITICO'S MORNING AGRICULTURE, 1/28/20

Dean Foods and the Dairy Farmers of America co-op are discussing a potential deal for DFA to buy Dean's assets, after the Dallas-based dairy giant went bankrupt in November. The arrangement would combine two massive entities in the milk sector: Dean sold $4.8 billion in 2018, more than any other processor, while DFA estimates that it markets a third of all milk in the U.S.

The potential market impact of such a deal has raised fears among some farmers about excessive consolidation in the industry — especially with milk production already shifting toward a shrinking number of bigger companies. Others welcome the idea of DFA taking over Dean's operations, which purchase about 10 percent of all U.S. milk, per company estimates.

Now federal antitrust regulators are getting involved, interviewing farmers and retailers about how the merger would shift the competitive landscape in dairy, The Wall Street Journal reports. "We are investigating Dairy Farmers of America's potential acquisition of Dean Foods and the potential loss of competition for selling raw milk," a DOJ antitrust attorney wrote in a message to a dairy farmer that was reviewed by WSJ.

One concern among milk producers is the inherent conflict between DFA's role in marketing farmers' products versus running its own processing operations, which would be exacerbated by the co-op owning even more plants and growing its purchasing power.

A DFA executive said the co-op has talked to the government about the potential Dean merger, and said that any agreement would be subject to approval from antitrust regulators and the bankruptcy court.