Got milk monopoly?
UPDATE: Ask and ye shall receive. In a NYT article last Saturday, describing the considerable resistance anti-trust chief Christine Varney is already experiencing in her attempt to toughen enforcement, came this nugget:
At the request of some lawmakers, notably Senator Bernard Sanders, independent of Vermont, Ms. Varney is examining whether small agricultural operations are being hampered unfairly by large food processors, particularly in the milk industry, congressional aides said.
Not much to go on, but at least they’re looking at the problem—and possibly looking beyond dairy, which would be interesting indeed. The article doesn’t provide any more details—most of it describes the split within the administration itself over anti-trust issues involving the transportation and communication industries. It’s worth watching to see what happens when Big Food’s administration allies mobilize over anything Ms. Varney cooks up. Still, at least she’s paying attention.
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Earlier this year, the Obama adiministration’s top antitrust enforcer, Christine Varney, announced a new effort to crack down on monopolist practices in industry. Some of us were particularly interested to observe that Varney’s first speech specifically mentioned agribusiness as a top target. This is understandable since, from fertilizer to meatpacking to seeds, four companies or fewer control up to 80% of each of these markets.
But right now nowhere are the oligolopolists doing more damage than in the dairy industry, where prices have fallen faster and deeper than any time since the Great Depression. And now, joining ranks with tens of thousands of desperately struggling dairy farmers, Sen. Bernie Sanders of Vermont has had enough—he has called on the Justice Department to investigate the dairy giant Dean Foods as a monopolist.
It’s about time someone in government used that word to describe Dean Foods. They control 40% of the fluid milk supply nationwide and, to Sen. Sanders’ great dismay, almost 70% of fluid milk in New England. But surely, with milk prices scraping the bottom, they must be suffering as well. Nope.
At the end of 2008, Dean Foods reported adjusted quarterly operating income of $184m, the highest in its history.
...While Dean Foods continues to increase its profits, milk prices have taken a tumble. At a press conference in his offices, Sanders said: “Farmers have seen the price for their milk drop from $19.50 per hundred pounds a year ago to less than $11 in June. Meanwhile, Dean Foods’ profits climbed from $30m in the first quarter of 2008 to $76.2m for the first quarter of 2009.”
Dean Foods, of course, denies the accusations of monopoly and points out that milk prices are regulated by the government. This is true. What Dean Foods doesn’t mention is that a relatively recent reform allowed the “government-set” milk price to be determined by the price of milk on the Chicago Mercantile Exchange. So really, the government punted to the commodities market—and it’s been a fun ride, hasn’t it?
Markets, after all, are always right and never subject to manipulation. That was why everyone was so shocked when the Dairy Farmers of America—another effective monopolist that controls 40% of the nation’s dairy production—was fined $12 million dollars and was barred from the exchange by the government for price fixing. And they weren’t, mind you, trying to fix a higher price for milk. In essence, wholesale milk pricing has been privatized, while the store price for milk remains regulated by state and regional compacts—with companies like Dean Foods profiting lavishly on the spread.
That, my friends, is capitalism at work.
So, when Secretary of Agriculture Tom Vilsack visits rural areas he is often met, as he was the other day in Wisconsin, by protesting dairy farmers. Meanwhile his response, and the response of the administration generally, continues to be anemic. Some emergency money has been distributed—but suffice it to say that these efforts amount to no more than sticking fingers in a crumbling dike.
The government inertia over the dairy crisis is due, in large part, because the administration agrees with Big Ag that consolidation in agriculture is inevitable—even a benefit to society. Consolidation leads to lower prices—which appears to be the only wholeheartedly embraced goal of the USDA. But the flip side to that embrace is that lower prices lead to more consolidation—and eventually there will be only a handful of corporations producing (or importing) most of our milk. To be honest, Vilsack, and even Obama, verge on hypocrisy when they decry rural depopulation and economic collapse while they endorse—tacitly or not—this continued consolidation in agriculture.
With the administration unwilling to use existing authority under the law to step in and adjust the price of milk or to look into the mass importation of dried milk products from overseas—as many have called on it to do—the very least it could do would be to support Sen. Sanders call for anti-trust action against Dean Foods. Doing so would finally put a bit of real muscle behind Obama’s “rural agenda.” Ms. Varney—it’s your move.
h/t GastroNomolies
Comments
View as Flat
Tasermons Partner Posted 4:25 pm
18 Jul 2009
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Catmoves Posted 9:18 am
21 Jul 2009
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Delay And Deny Posted 9:55 pm
18 Jul 2009
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Naturally Posted 3:15 pm
19 Jul 2009
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Tasermons Partner Posted 12:16 pm
20 Jul 2009
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Nom-Nom-Om-Nom Posted 12:43 pm
20 Jul 2009
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Jim Goodman Posted 7:55 pm
28 Jul 2009
ALL organic dairies are supposed to be eco-freindly, thats the whole idea of organic. There aren't all that many niche markets out there are there? Where are they, who are they, what products do they want?
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markboyer Posted 1:44 pm
20 Jul 2009
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Tasermons Partner Posted 10:28 am
21 Jul 2009
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mmaisto Posted 2:12 pm
21 Jul 2009
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lilcheese Posted 5:05 pm
21 Jul 2009
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Chris Pratt Posted 7:03 pm
21 Jul 2009
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magicdave Posted 3:52 pm
22 Jul 2009
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Tasermons Partner Posted 4:18 pm
23 Jul 2009
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Alida Antonia Cornelius Posted 7:48 am
24 Jul 2009
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Username Posted 10:41 am
28 Jul 2009
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magicdave Posted 8:27 pm
28 Jul 2009
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amazingdrx Posted 8:51 pm
28 Jul 2009
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magicdave Posted 11:20 pm
28 Jul 2009
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amazingdrx Posted 7:12 am
29 Jul 2009
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magicdave Posted 12:34 pm
29 Jul 2009
 Cheese making facilities are a great idea but most cheeses are made from milk that is "cooked" and that kills most if not all of the beneficial bacteria that are in Raw Milk.  I truly appreciate your ideas and am sure they will help in the several areas that you mentioned but I will still continue to fight to legalize the sale of Raw Milk since it is a major health benefit to us all.
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amazingdrx Posted 9:04 pm
29 Jul 2009
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Des Emery Posted 9:25 pm
29 Jul 2009
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Tom Laskawy Posted 10:53 am
02 Aug 2009
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Alida Antonia Cornelius Posted 7:50 pm
06 Aug 2009
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magicdave Posted 1:37 pm
02 Aug 2009
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Des Emery Posted 5:51 pm
02 Aug 2009
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Storm Dragon Posted 3:33 pm
03 Aug 2009
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Des Emery Posted 6:22 pm
03 Aug 2009
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magicdave Posted 8:53 pm
03 Aug 2009
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magicdave Posted 10:06 pm
03 Aug 2009
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Alida Antonia Cornelius Posted 12:15 am
04 Aug 2009
Raw milk is good if you have your own cow and go milk it and drink it right away and know how to keep it from getting contaminated between the barn and the dinner table. I would never drink raw milk unless I had my own cow.
In India they drink raw milk all the time....someone with a goat in your neighborhood sells it to you at your door.
Raw milk products are never going to go mainstream in the USA again.
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Des Emery Posted 7:24 pm
04 Aug 2009
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Alida Antonia Cornelius Posted 7:41 pm
04 Aug 2009
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magicdave Posted 11:31 pm
04 Aug 2009
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Alida Antonia Cornelius Posted 6:30 am
05 Aug 2009
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magicdave Posted 2:34 pm
05 Aug 2009
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amazingdrx Posted 3:49 pm
05 Aug 2009
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magicdave Posted 7:12 pm
06 Aug 2009
1. How is the cowshare program with Avery's Branch Farms set up?
You make a one-time payment of $100 to buy a share in one of Avery's Branch Farms' Jersey cows for the lifetime of the cow. From that point on you actually own a share of that cow. In addition, you pay a $35 boarding fee each month for the feeding and care of your cow. Your share entitles you to one gallon of milk each week. You may buy as many shares as you would like. We also offer half shares, which entitle you to a half gallon of milk each week. They are half the price of a full share.
The price is cost prohibitive for me to purchase cow's milk from this farmer because I live about 2 hours drive time from this farm to have them "meet me half way" once a week costs an additional $2.50 per week for 1 gallon of milk? That over $11 a gallon. These farmers are making a killing selling direct. Picking up 1 gallon of milk a week is still cost prohibitive because not counting the upfront $100 at $35 a month for a boarding fee for 1 gallon of milk per week is still $8.75 per gallon. I am sorry but that price is way out of line for milk. I buy my milk from a farmer that pastures his cows because I was out driving one day and saw him trying to catch a heifer that had gotten loose. I helped him "drive" the heifer back into the pen when she was supposed to be and we got talking. Just for helping him I go pick up a gallon or two of milk from his Brown Swiss pastured cows for a very reasonable $4 a gallon. Herd share sellers are making a killing at the rate they charge and I believe that the unsuspecting purchasers of herd shares don't realize what they are paying but have a romantic notion of owning a part of a cow. I am all for having Raw Milk available to those who desire it but not at between $9 and $11 per gallon. Those costs just aren't realistic.
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magicdave Posted 4:49 pm
05 Aug 2009
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Alida Antonia Cornelius Posted 10:16 pm
05 Aug 2009
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amazingdrx Posted 9:49 am
06 Aug 2009
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magicdave Posted 5:51 am
06 Aug 2009
Weston A.Price was a dentist but he authored a book titled Nutrition and Physical Degeneration 60 years ago that has much relevance today for anyone that is concerned about diet and why so many debilitating diseases are rampant especially in all of the industrialized nations of the world. He spent more than 10 years of research before he wrote it and it will really open your eyes to what has happened to our food supply and our diets in general. This "quest" of mine is not something new for me but rather the path I chose when I was still a young boy. My interest in nutritional healing started back in the 50's when a neighbor began teaching me about the "old ways" of the Native Americans of the North Eastern U.S, he was a "Medicine Man" and I learned much about the herbs that they used to treat various "conditions."
I appreciate your compliment about my description of why raw milk is better for you than that white liquid sold as milk that I consider to be poison.Thank you.
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Alida Antonia Cornelius Posted 7:33 pm
06 Aug 2009
I know about monopolistic practices and believe me, in the Chicago Commodities Exchange and the Chicago Board of Trade, many of the big players in commodities owning vertical integration businesses in the food industry, it is my observation that the markets are being manipulated in the dairy and beef industries just like banks holding and owning oil to make a profit.
More regulation is needed to prevent monopolistic practices in those areas of consumer products and to control vertical integration practices and other unregulated business practices which will prevent only a few large global companies from controlling the markets. Because that is what they are doing.
Nice discussion here.
Many points of view and good observations.
Regards to all...
I hope our legislators listen and consider what is really going on in the dairy and also the beef industry.
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amazingdrx Posted 9:35 pm
06 Aug 2009
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magicdave Posted 4:06 am
07 Aug 2009
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amazingdrx Posted 5:26 am
07 Aug 2009
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