Looks like it. Nonetheless, my guess is the milk program will be the most impregnable to any meaningful change, given the power of the participants. (Thinking about it, a payment cap change might have significant impact.)
Hein Hettinga, who owns a small Arizona dairy farm, took on big business and lost. Hettinga was competing for retail sales against Arizona's largest milk company, Shamrock Foods. Hettinga chose not to participate in the federal government program and the United Dairymen of Arizona (UDA) complained that he was affecting the USDA price-setting formula causing lower returns for other dairies. The UDA cooperative handles 85% of the state's milk. Powerful lobbyists paid off some politicians to have a law passed, which in effect, required Hettinga's Sarah Farms to participate in the program. He now has to pay his competitors $400,000 a year to stay in business - a sum that cripples his operation. According to some activists who claim sarcastically, this is why we need socialism - to keep big companies big and keep the little guy down. Hettinga has filed a federal lawsuit, alleging that the so-called Milk Regulatory Equity Act of 2005 is unconstitutional. [More]Which is why I am not optimistic about the future for small producers, except perhaps agrarian/organic/raw farmers who can connect directly to the consumer. The tricky thing there is we really don't know how large or wealthy that sector of milk buyers is. Or whether that nascent supply chain will be shut down by nervous conventional milk producers.
4 comments:
The NYTimes today ran a story in the business section on the expansion of organic milk supply. A number of farmers are completing the switch before more restrictive rules come into play.
http://www.nytimes.com/2007/04/20/business/20milk.html?ref=business
John,
Do you really not understand this? Hein has one of the largest dairy farms in the west. The federal order system ensures all producers whether large or small get paid what all producers should as a group. Mr Hettinga doesn't want to pool or share the drinking (Class 1) milk price with those dairymen who balance the market, that is use milk not required for bottling on a given day for storable products like cheese or powder and butter.
I'm disappointed in you. I generally find your comments well researched and thought out. This plays well in consumer press but don't try to put this out to a group of farmers where at least 1 or 2 understand the federal order system. :-)
Anon: You are correct in pointing out my ignorance of the delicacies of the federal milk order system. But my overall reading of the basis for the system I find unconvincing.
Most federal programs for commodity regulation whether grain production, fruit marketing orders or the federal dairy program proceed from the firm belief the commodity and/or producers possess special qualities that makes open markets unequal to the task of matching supply and demand. I have seen none that hold up under scrutiny. As for dairy, NZ seems to manage for instance with supply/distribution controls.
If by the abstruse rules of the marketing orders, Mr. Hettinga crossed the line may be very true. I simply doubt the need for those rules. The reason it "plays very well in the consumer press" is consumers may be discovering they are paying for an expensive program with very few benefits for them.
Correction to above: "NZ seems to manage for instance without...
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