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Plastic milk crates have been disappearing in record numbers as thieves capitalize on soaring prices for recycled plastic.

For decades, college kids have used stolen milk crates as the basic building blocks of coffee tables and dorm room shelves.

Now, a new breed of crate rustler is cashing in by swiping thousands of the containers from loading docks and selling them to shady recyclers.

The containers are chopped into bits and shipped to booming factories in China to be made into a variety of products, from pipes to flower pots.

Facing an estimated $80-million in annual losses from the thefts, dairies across the country are moving to stop the plastic pilfering. In California, companies are even hiring private detectives and staging sting operations.

"We saw them disappearing into this black hole," said Rachel Kaldor, executive director of the Dairy Institute, a trade group in Sacramento. "We just don't know who's stealing these crates off the loading docks."

In the past two years, the high-density polyethylene has joined a growing list of materials that are being stolen and sold via a thriving underground recycling network.

Among other things, thieves target copper, aluminum bleachers, beer kegs, even cemetery vases and nameplates.

It took a while for dairies to determine what was happening to their crates.

"If it were just college kids taking them, the dormitories would be overflowing with milk cases," said Stephen Schaffer, general manager of Alta Dena Dairy near Los Angeles.

Last year, the industry lost about 20-million crates to thieves, said Clay Detlefsen, vice president and counsel of the International Dairy Foods Association.

California, the nation's largest dairy state, has taken the lead in the fight against plastic poachers.

Already hurt by the theft of milk-producing hormones and incidents of cattle rustling, the state dairy industry persuaded legislators to pass a law last year that allows dairies to sue recyclers accused of accepting stolen crates. No cases have hit court yet, Kaldor said.

After the law went into effect last January, the Dairy Institute hired private investigator Chuck Wall to educate recyclers about documenting purchases and to conduct sting operations against suspected offenders.

Wall, the CEO of Creative Security of San Jose, began his efforts close to his home in Santa Clara County, building on a previous local law enforcement crackdown on the theft of copper wire from construction sites.

He and undercover agents shopped around a truckload of milk crates. The 11 recyclers who took the bait were arrested.

In April, he said, he and his colleagues recovered 24,000 pounds of ground-up plastic from crates belonging to dairies, bakeries and beverage companies.

"It took a 50-foot trailer to haul all the stolen property out of there - at least a quarter-million dollars of plastics," Wall said.

Why the thefts?

Last year, the dairy industry lost 20-million milk crates to thieves and face $800-million in annual losses for the thefts. The high-density polyethylene the crates are made from, a petroleum-based plastic, has increaed in value along with gasoline prices. The material now sells for 22 cents a pound, compared with 7 cent a pound in 2005.