Over alleged claims that the Dairy Farmers of America was involvedin milk price fixing, the cooperative agreed to pay $140 million toplaintiffs that filed a class action lawsuit.

Under the terms of the settlement, filed Tuesday with the U.S.District Court for the Eastern District of Tennessee, the DFA saidit will pay $140 million to the plaintiff class.

An additional, refundable $9.3 million per year for two yearswill be placed in a separate fund to incentivize stronger rates,the cooperative said.

The class action lawsuit alleged that the DFA worked with U.S.milk processor Dean Foods Co., and other groups to curb competitionin more than a dozen states in the Southeast.

According to the suit, Dean Foods kept control of milk prices byallegedly allowing the DFA, working through a number of entities,to manage supply of its member farmers as well as independentproducers that opted to provide milk bottlers through separatecontacts.

The DFA made no admission of wrongdoing in this settlement,according to a statement from the cooperative.

In addition to Dean Foods, National Diary Holdings and Mid-AmCapital were among those named as defendants in the suit. Mid-AmCapital is DFA's finance subsidiary and National Dairy Holdingsdivested from the cooperative in 2009.

The settlement came down to the wire as the case against the DFAwas scheduled to go to trial on Tuesday. Filed in 2007, thesettlement will be paid out to thousands of farmers in 14 states. In 2011, Dean Foods reached an additionalsettlement for $140 million.

Also included in the agreement are remedial elements regardingreporting, accounting and communication of certain businessinformation and functions, the DFA said in a statement. Thecooperative said many of these components are consistent with newpolicies and procedures the cooperative's management voluntarilydeveloped and implemented previously to emphasize a culture ofopenness and transparency.

“Our board and management team have worked diligently to putcertain old issues behind us,” said Rick Smith, DFA president/CEO,in a statement. “This outcome positions DFA to fulfill a commitmentto our members to resolve pending litigation, to remove a source ofdistraction for our leadership and to avoid additional legalfees.”

Based in Kansas City, Mo., the DFA said it serves more than16,800 farmers.

Smith said the payment of the settlement will not affect DFA'sday-to-day operations or its ability to market members' milk or paythem a competitive price for that milk. Member milk checks and themember equity program will not be impacted, he added.

“The cooperative remains healthy and poised for a brightfuture,” Smith said. “We continue to develop new member programsand invest in plants and new products. We also continue to seek outnew opportunities and innovative ways to increase value to ourdairy farmer owners.”