CaseyJones
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Report: Milk Could Skyrocket To $8 A Gallon If Farm Bill Not Passed
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helmuth_hubener
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Report: Nation's Cows Could All Die If Farm Bill Not Passed
The fight over renewing the nation’s farm bill has centered on cuts to the $80 billion-a-year food stamp program. But there could be unintended consequences if no agreement is reached: mountains of dead cows.
Members of the House and Senate are scheduled to begin long-awaited negotiations on the five-year, roughly $500 billion bill this week. If they don’t finish it, dairy supports could expire at the end of the year and send all cows to the slaughterhouse.
KLTV reports that the number of dead cows could reach 100 million.
“We are pretty much at the mercy of the cows. We have no control over their untimely deaths without the government,” dairy farm manager Bear Vanderwier told KLTV.
The fight over renewing the nation’s farm bill has centered on cuts to the $80 billion-a-year food stamp program. But there could be unintended consequences if no agreement is reached: mountains of dead cows.
Members of the House and Senate are scheduled to begin long-awaited negotiations on the five-year, roughly $500 billion bill this week. If they don’t finish it, dairy supports could expire at the end of the year and send all cows to the slaughterhouse.
KLTV reports that the number of dead cows could reach 100 million.
“We are pretty much at the mercy of the cows. We have no control over their untimely deaths without the government,” dairy farm manager Bear Vanderwier told KLTV.
phill4paul
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helmuth_hubener
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The stench alone will be a health hazard. Not to mention the traffic problems that mountains of dead cows in the streets would cause.
Come on, Congress! Stop playing partisan games and start getting along!
Come on, Congress! Stop playing partisan games and start getting along!
Cleaner44
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Looks like this is hidden price inflation to me. Apparently the true price of milk should be $8 a gallon but this has been hidden from the public as they are forced to subsidize the market whether they like the product or not. I guess real price inflation is worse than the government reports to the public. I am guessing that John Williams at Shadow Government Statistics already knows this.
Last edited:
ClydeCoulter
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Good, then a decent black market will get created and they can ramp up the "war on milk". /sarc
The people would be really surprised at how prices would go up on a whole of things if subsidies were to stop. Hidden prices or "shared pain" stops, prices go up.
edit: hah, @Cleaner beat me to it
The people would be really surprised at how prices would go up on a whole of things if subsidies were to stop. Hidden prices or "shared pain" stops, prices go up.
edit: hah, @Cleaner beat me to it
Last edited:
libertyjam
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The Agricultural Act of 1949 sets a much higher price for government purchases of cheese, butter and other dairy products than the U.S. has seen in decades. The government cut the price in recent decades because if it didn't, more companies would sell to the government than to retailers, unless consumer prices rose to match.
Farmers fear if the higher prices kick in on Jan. 1, milk and other dairy prices will rise until consumers just stop buying their products.
"I don't think that's good for anybody because we would destroy demand," said Pete Kappelman, a Wisconsin dairy farmer and board chairman of Land O'Lakes, a farmer-owned company that markets milk, eggs, butter and many other products.
The farm bill failed in the House mainly because of disagreement over food-stamp funding and dairy program reforms farmers say are needed to keep them in business.
The government currently pays dairy farmers when milk prices get too low. But the problem in recent years has been the high cost of feed due to the ethanol industry's demand for corn as well as the drought. Farmers say milk costs almost as much to produce as they can sell it for — and sometimes more.
Kappelman, who has a 450-cow farm in Manitowoc, Wis., worked on a national dairy industry committee that proposed a margin protection program that pays farmers when the price difference between milk and feed shrinks to a certain point.
He also supports a market stabilization program that would require farmers to either reduce the amount of milk produced when prices drop too low or give up a portion of their margin protection payments. The U.S. Department of Agriculture would then use that money to buy and donate dairy products to food banks and help low-income families.
The margin protection and market stabilization programs would be voluntary, but farmers couldn't participate in one without the other.
The Senate passed a farm bill last week that included both the margin protection and market stabilization programs, but House Republicans voted to remove the market stabilization program. Minnesota Rep. Collin Peterson, the senior Democrat on the House Agriculture Committee, said a number of Democrats changed their vote to no at that point.
Randy Roecker, 40, was among those desperately hoping the complete package would pass. He and his wife farm with his parents in Loganville, Wis.
They were doing well in 2008, when they renovated to expand from 50 to 300 cows. The next year, milk prices plummeted and feed prices rose. At one point, they were losing $100,000 a month — Roecker lost his savings, his parents lost their retirement and the farm went into debt.
They and many of their neighbors are still struggling, even though milk prices have risen.
"Just last Friday, another one of my friends got rid of his cows," Roecker said. "... It's just getting to the point where you can't afford to keep going anymore."
Wisconsin farmers grow more of their own feed than those in states like California, the nation's top milk producer. Dean Strauss, 41, who milks 1,900 cows in Sheboygan Falls, said growing 3,000 acres of feed provides some protection from high feed prices but doesn't reduce the need for a new farm bill, which would likely have better crop insurance programs.
Strauss, who described himself as a "free-market" person, was among the farmers who opposed the market stabilization program, fearing that any reduction in milk production would stifle growth in the Wisconsin cheese industry, which buys most of his milk.
Jamie Bledsoe, who has 1,300 cows in Riverdale, Calif., had similar concerns about the effect on his state's growing, international dairy exports.
"My personal view is, the government does not effectively manage anything, let alone the supply of milk," Bledsoe said.
But Kappelman said that without a way to control supply when milk prices fall too low, farmers would keep producing, the margins would stay low and the government would have to keep shelling out.
Even with disagreement over the stabilization program, farmers were united on the message they wanted to send to Congress. Failure to pass a farm bill, Bledsoe said, "leaves us in a big cloud of uncertainty."
___
Associated Press writer Gosia Wozniacka in Fresno, Calif., contributed to this report.
http://news.yahoo.com/farmers-warn-high-milk-prices-without-farm-bill-171708413.html
Farmers fear if the higher prices kick in on Jan. 1, milk and other dairy prices will rise until consumers just stop buying their products.
"I don't think that's good for anybody because we would destroy demand," said Pete Kappelman, a Wisconsin dairy farmer and board chairman of Land O'Lakes, a farmer-owned company that markets milk, eggs, butter and many other products.
The farm bill failed in the House mainly because of disagreement over food-stamp funding and dairy program reforms farmers say are needed to keep them in business.
The government currently pays dairy farmers when milk prices get too low. But the problem in recent years has been the high cost of feed due to the ethanol industry's demand for corn as well as the drought. Farmers say milk costs almost as much to produce as they can sell it for — and sometimes more.
Kappelman, who has a 450-cow farm in Manitowoc, Wis., worked on a national dairy industry committee that proposed a margin protection program that pays farmers when the price difference between milk and feed shrinks to a certain point.
He also supports a market stabilization program that would require farmers to either reduce the amount of milk produced when prices drop too low or give up a portion of their margin protection payments. The U.S. Department of Agriculture would then use that money to buy and donate dairy products to food banks and help low-income families.
The margin protection and market stabilization programs would be voluntary, but farmers couldn't participate in one without the other.
The Senate passed a farm bill last week that included both the margin protection and market stabilization programs, but House Republicans voted to remove the market stabilization program. Minnesota Rep. Collin Peterson, the senior Democrat on the House Agriculture Committee, said a number of Democrats changed their vote to no at that point.
Randy Roecker, 40, was among those desperately hoping the complete package would pass. He and his wife farm with his parents in Loganville, Wis.
They were doing well in 2008, when they renovated to expand from 50 to 300 cows. The next year, milk prices plummeted and feed prices rose. At one point, they were losing $100,000 a month — Roecker lost his savings, his parents lost their retirement and the farm went into debt.
They and many of their neighbors are still struggling, even though milk prices have risen.
"Just last Friday, another one of my friends got rid of his cows," Roecker said. "... It's just getting to the point where you can't afford to keep going anymore."
Wisconsin farmers grow more of their own feed than those in states like California, the nation's top milk producer. Dean Strauss, 41, who milks 1,900 cows in Sheboygan Falls, said growing 3,000 acres of feed provides some protection from high feed prices but doesn't reduce the need for a new farm bill, which would likely have better crop insurance programs.
Strauss, who described himself as a "free-market" person, was among the farmers who opposed the market stabilization program, fearing that any reduction in milk production would stifle growth in the Wisconsin cheese industry, which buys most of his milk.
Jamie Bledsoe, who has 1,300 cows in Riverdale, Calif., had similar concerns about the effect on his state's growing, international dairy exports.
"My personal view is, the government does not effectively manage anything, let alone the supply of milk," Bledsoe said.
But Kappelman said that without a way to control supply when milk prices fall too low, farmers would keep producing, the margins would stay low and the government would have to keep shelling out.
Even with disagreement over the stabilization program, farmers were united on the message they wanted to send to Congress. Failure to pass a farm bill, Bledsoe said, "leaves us in a big cloud of uncertainty."
___
Associated Press writer Gosia Wozniacka in Fresno, Calif., contributed to this report.
http://news.yahoo.com/farmers-warn-high-milk-prices-without-farm-bill-171708413.html
angelatc
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There's already a price floor on milk because there are too many farmers producing it. So, if we remove that floor, it is entirely likely that the prices will drop and some farmers will exit the business.
Prices will then rise. That's how markets are supposed to work.
Prices will then rise. That's how markets are supposed to work.
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angelatc
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If milk is already worth $8.00 a gallon, the farmers would be screeching that the government controls were costing them money.
ClydeCoulter
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Ah, but the fear is so exhilarating!
libertyjam
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Both sides have used that lack of knowledge to make their case in simple terms. Opponents say that because the stabilization program is designed to help dairy farmers sell their product to companies at higher prices, consumers would be paying more for dairy products in the grocery store. The bill's supporters say the new program would have little effect on grocery store prices but would keep taxpayers from having to shell out more in dairy insurance.
Peterson says the issue has been "almost impossible to explain."
"Everyone's kind of playing on everyone's lack of understanding on this," he said.
http://www.huffingtonpost.com/2013/06/17/milk-money-farm-bill_n_3453393.html
Peterson says the issue has been "almost impossible to explain."
"Everyone's kind of playing on everyone's lack of understanding on this," he said.
http://www.huffingtonpost.com/2013/06/17/milk-money-farm-bill_n_3453393.html
libertyjam
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libertyjam
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Excerpted from: http://www.cato.org/sites/cato.org/files/pubs/pdf/tbb_0707_47.pdf
Effects of Federal Dairy Programs
The USDA says that the purpose of milk marketing
orders is to “promote orderly milk marketing relationships
to ensure adequate supplies of milk and dairy products to
meet consumers’ demands at reasonable prices.”3 But it
unlikely that dairy products need subsidies and controls to
fulfill those goals. After all, the market price system
achieves “adequate supplies” at “reasonable prices” without government help for thousands of other products such as automobiles, books, and computers.
In fact, current dairy policies do not deliver “reasonable” prices at all. Because of federal controls, milk prices are higher than they would otherwise be, which penalizes millions of families. The Organization for Economic Cooperation and Development found that U.S. dairy policies create a 26 percent “implicit tax” on milk consumers.4 This milk “tax” is regressive, causing relatively greater harm to low-income families.
The Government Accountability Office compared U.S. dairy prices to world prices over a seven-year period.5 It found that U.S. prices for butter averaged twice the world price, cheese prices were about 50 percent higher, and nonfat dry milk prices were about 30 percent higher.
The taxpayer costs of dairy policies are also of concern. Those costs range from zero to $2.5 billion annually depending on market conditions.6 Dairy policies are expected to cost taxpayers at least $600 million over the next decade.7
U.S. dairy policies also harm international trade relations. Dairy subsidies are a barrier to moving ahead with the stalled Doha Round of trade talks. U.S. trade protections for agriculture have inhibited the liberalization of trade in other sectors, to the detriment of U.S. companies that want to expand their exports and consumers who would benefit from lower prices.
Entrepreneurs Not Allowed
The irrationality of federal dairy controls was driven home by the struggle over dairy entrepreneur Hein Hettinga in 2006.8 Hettinga, a Dutch immigrant, began a dairy farm and milk bottling plant in Arizona in the 1990s outside of the government system. He sold his milk to local Arizona stores and to Costco in California at 20 cents per gallon less than government-regulated milk. His low prices met with a strong demand, and his business expanded rapidly. Costco executives believed that consumers were being “gouged” by the government system, and they were happy to provide customers with Hettinga’s discount milk.
However, farmers and others in the regulated system were not happy with the competition from Hettinga. They pushed for Congress to intervene, and a political battle ensued, which cost more than $5 million in lobbying fees. Both Democrats and Republicans sought to protect home-state dairy interests, and they teamed up to crush Hettinga and close the channel through which he was operating.9
Based on his experience, Hettinga said “I had an awakening . . . it’s not totally free enterprise in the United States.”10 That lack of free enterprise not only keeps milk prices high, but results in a U.S. dairy industry that is not as innovative as the less regulated New Zealand industry.11 The dependence on government purchases of dry milk, for example, has “removed the incentive for companies to diversify and invest in the production of high-value dairy products of the future.”12
Conclusions
U.S. dairy programs are Byzantine in their complexity and create the most rigidly controlled of all agricultural markets. The ultimate effects are to transfer income from consumers and taxpayers to dairy businesses and to stifle innovation in this $90 billion industry.
In this year’s farm bill, the Democrats have a chance to repeal the special interest giveaways of prior Republican farm bills, including the regressive “milk tax.”
Effects of Federal Dairy Programs
The USDA says that the purpose of milk marketing
orders is to “promote orderly milk marketing relationships
to ensure adequate supplies of milk and dairy products to
meet consumers’ demands at reasonable prices.”3 But it
unlikely that dairy products need subsidies and controls to
fulfill those goals. After all, the market price system
achieves “adequate supplies” at “reasonable prices” without government help for thousands of other products such as automobiles, books, and computers.
In fact, current dairy policies do not deliver “reasonable” prices at all. Because of federal controls, milk prices are higher than they would otherwise be, which penalizes millions of families. The Organization for Economic Cooperation and Development found that U.S. dairy policies create a 26 percent “implicit tax” on milk consumers.4 This milk “tax” is regressive, causing relatively greater harm to low-income families.
The Government Accountability Office compared U.S. dairy prices to world prices over a seven-year period.5 It found that U.S. prices for butter averaged twice the world price, cheese prices were about 50 percent higher, and nonfat dry milk prices were about 30 percent higher.
The taxpayer costs of dairy policies are also of concern. Those costs range from zero to $2.5 billion annually depending on market conditions.6 Dairy policies are expected to cost taxpayers at least $600 million over the next decade.7
U.S. dairy policies also harm international trade relations. Dairy subsidies are a barrier to moving ahead with the stalled Doha Round of trade talks. U.S. trade protections for agriculture have inhibited the liberalization of trade in other sectors, to the detriment of U.S. companies that want to expand their exports and consumers who would benefit from lower prices.
Entrepreneurs Not Allowed
The irrationality of federal dairy controls was driven home by the struggle over dairy entrepreneur Hein Hettinga in 2006.8 Hettinga, a Dutch immigrant, began a dairy farm and milk bottling plant in Arizona in the 1990s outside of the government system. He sold his milk to local Arizona stores and to Costco in California at 20 cents per gallon less than government-regulated milk. His low prices met with a strong demand, and his business expanded rapidly. Costco executives believed that consumers were being “gouged” by the government system, and they were happy to provide customers with Hettinga’s discount milk.
However, farmers and others in the regulated system were not happy with the competition from Hettinga. They pushed for Congress to intervene, and a political battle ensued, which cost more than $5 million in lobbying fees. Both Democrats and Republicans sought to protect home-state dairy interests, and they teamed up to crush Hettinga and close the channel through which he was operating.9
Based on his experience, Hettinga said “I had an awakening . . . it’s not totally free enterprise in the United States.”10 That lack of free enterprise not only keeps milk prices high, but results in a U.S. dairy industry that is not as innovative as the less regulated New Zealand industry.11 The dependence on government purchases of dry milk, for example, has “removed the incentive for companies to diversify and invest in the production of high-value dairy products of the future.”12
Conclusions
U.S. dairy programs are Byzantine in their complexity and create the most rigidly controlled of all agricultural markets. The ultimate effects are to transfer income from consumers and taxpayers to dairy businesses and to stifle innovation in this $90 billion industry.
In this year’s farm bill, the Democrats have a chance to repeal the special interest giveaways of prior Republican farm bills, including the regressive “milk tax.”
Acala
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The government can MAKE you buy dairy, mister.
phill4paul
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Pretty much what a subsidy does. I'd give rep, but I'm outta ammo.
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