Got Milk? Got Money!

Ever wonder why the price of milk is so high and keeps rising? Three guesses... No, the cows are not demanding more pay. No, people are not demanding more products. So what is the reason? Well, the U.S. government does not allow competition. Marketing orders “set minimum prices that dairy processors must pay to dairy farmers in 10 regions of the country.” Higher-cost regions in the U.S. are protected from lower-cost regions. “The government will purchase any amount of cheese, butter, and dry milk from processors at a set minimum price.” There is “an income support program for dairy farmers.” There are “import barriers on milk, butter, cheese, and other products.” They “are limited to about 5 percent or less of U.S. consumption.” “The Government Accountability Office compared U.S. dairy prices to world prices over the period 1998 to 2004. It found that U.S. prices for butter averaged twice the world price, cheese prices were about 50 percent higher, and dry milk prices were 24 percent or more higher.” Sooo, so much for lip-service to a free market. It doesn’t exist... because it’s not allowed to exist.

Source for all quotes: http://www.cato.org/pub_display.php?pub_id=8479