Forums Index >> General >> Feds trying to squash competition!?
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The local milk we buy around here has stickers on the side with that website address. I've not visited the site 'till just now. Adding artificial (government imposed) costs to production is generally a bad idea. Especially when the regulation is in an effort to keep more expensive production methods operating.
From the http://www.keepmilkpriceslow.org/
site:
Large dairy interests testified before USDA that producer-handlers are able to sell their milk at prices that are too low. The result for these dairy industry giants is reduced profit margins from selling their milk at lower prices. The USDA recommends imposing upon certain producer-handlers a "pool obligation" estimated to be over one million dollars per year. If permitted to take effect, the result will be that producer-handlers will either raise their prices to cover this new expense or leave the market entirely. Either option will increase costs for the consumer.
Producer-handlers who meet this definition are currently exempt from the pricing and pooling provisions of the federal milk marketing orders which set minimum prices and control the flow of milk within their order areas. Because producer-handlers produce all of their own milk supply and do not purchase milk from other farmers, they are exempt from these pricing and pooling provisions. Producer-handlers have proven their ability to produce and market their fluid milk at competitive prices and better serve their customers because of their quality products and innovative market practices.
Oddly enough, the situation here is actually one that stems out of the government being involved in the first place. So the producer-handlers have a competitive edge because they aren't regulated the same. Ironically (now I take a sophomoric shot in the dark) I bet that the original 'pricing and pooling' regulations were put in place under the banner of "saving family farms." Even now, I have a feeling that both sides of this issue are bellowing the same "save the family farm" slogan. (Any links to the opposition stance on this issue?) Keep in mind that 'Dairy Farmers of America' would claim the "the small family farm" as one of their main constituents (even if the average farmer has very little pull..).
The question that arises in my mind is: do these producer-handlers farms have the competitive edge now only because of the regulations against their competition? So are the 'family farms' that are soon to be the victims mad now only because their loop-hole is closing?
Instead of adding regulation, would a better solution be to relax the existing regulations? Would that still threaten the profitability of the farms that are being threatened by this new regulation? What would be the unintended consequences of such an action?
This is of course all off the cuff, and not particularly informed... I must say it will be sad when our $2 price point for a gallon of milk goes away (it's getting harder and harder to find without the new changes).
You are right that milk isn't a free market in the US. There are many subsidies in place, and in the past, I believe they have often led to some farmers quitting the business. I find it ironic that the big producers are whining about smaller operations having an advantage.
I also hate to lose a good company...
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I live in an area with many cows, and there is a local dairy here that is family owned and operated. They make great stuff, and are a staple in the region. They do everything to produce, package, and ship their milk products themselves.
I'm wondering how our "conservative, free market" folks will react to this story.
In a recommendation issued on April 13, 2005, USDA sided with large, powerful dairy interests including Dairy Farmers of America (the largest dairy cooperative in the nation) and Dean Foods (the largest milk processor in the nation). Here's what they plan: Tax four independent family farms located in the Pacific Northwest and Arizona over one million dollars each per year and give that money to others in the dairy industry. Consumers get stuck with higher prices while the big guys increase their profits.
http://www.keepmilkpriceslow.org/
Does this sound like government caving in to special interests, or what? My opinion is that this confirms my thoughts about the current administration. They'll do anything to help big business, and to hell with family run businesses.
So much for wanting to encourage free enterprise...