Milking cows is a faster way to lose your shirt than building boats. I should know. I’ve done both. At least boat builders aren’t mandated to sell their boats for less than it costs to build them.
Etienne Desmarais has a dairy farm down the road a piece. It costs him about a buck and a half to make a gallon of milk he can now sell for a buck even. We used to dip our milk out of the bulk tank from Dory Simon’s dairy farm on the other side of us; 30 years ago we paid him a buck a gallon for the freshest, sweetest milk around. Dory sold his herd to Etienne some years ago because the production costs were bankrupting him. Etienne still rents his land.
The economics of farming haven’t gotten any better since we were dipping the bulk tank.
New England dairy farms produce 20% of the country’s milk and employ about 145,000 people. Vermont has 1,045 dairy farms today. A few are like Etienne’s, milking more than 300 or 400 head. Many milk less than 100. Vermont lost about six dairy farms last month alone. Guess why.
Uncle Sam essentially sets the milk price that farms receive through the 2008 Farm Bill (the Food, Conservation, and Energy Act of 2008) and its MILC (Milk Income Loss Contract) Program. That USDA program “provides direct counter-cyclical style payments to milk producers on a monthly basis when the Boston Federal Milk Marketing Order Class I price for fluid milk falls below the benchmark of $16.94 per hundredweight (cwt).” Milk prices have been a political cow pie since the first Farm Bill set a benchmark decades ago.
- Somehow I’m thinking $11/hundredweight (about a dollar a gallon) is below the benchmark.
- I’m also thinking three bucks or more is a lot to pay in the store for a bottle that cost one dollar at the farm.
Roger Allbee, the real Vermont Agriculture Secretary, just returned from Washington, D.C., where he asked for emergency money via increased payments through the MILC program.
This (latest) decision is expected to take months.
I have to wonder why we should pass the two trillion dollar health plan tomorrow when it takes months (or years) to fix milk prices.
“We’re from the government. We’re here to help.”
Here’s an interesting progression for the reader’s further consideration:
- Federal subsidies and price controls that began in the 1930s now determine which farmers fail or succeed.
- Federal subsidies and engineering controls that began with the automaker takeover of 2009 will assure which car builders fail or succeed.
- Federal price controls and mandates starting with the upcoming ObamaCare will guarantee which doctors and hospitals fail or succeed.
Since the same Federal Government that mandates milk prices will now set car prices at Government Motors, I reckon your next new Chevrolet or GMC pickup truck will cost the same as I paid for one in 1988. About $10,000, right?
I don’t know what to do about the price of milk, though.