Low milk prices are bad, it seems
Looks like the critters in Washington have done it again. Whenever someone finds a "loophole" (or, as it should be called, an island of liberty), they want to shut it down.
This time, it has to do with the price of milk in Arizona and California. Hettinga's dairy farm was offering 2 gallons of milk for $3.99 and of course the rest of the industry, seeing that Hettinga was competing "unfairly," called on Daddy State to save them. Thus,
On Tuesday, President George W. Bush quietly signed into law S. 2120, the so-called Milk Regulatory Equity Act of 2005, a carefully crafted piece of legislation which was aimed squarely at preventing Hettinga’s dairy farm from offering milk at lower prices than Dean Foods and other large milk distributors such as the Dairy Farmers of America.The bill, passed in both the House and Senate with almost no debate, amends the Agricultural Adjustment Act, part of the Agricultural Marketing Agreement Act of 1937, and will require Hettinga to participate in federal milk marketing order requirements, effective May 1.
The federal milk marketing program requires most milk producers and handlers to set minimum prices on their products and to pool their revenues. It also tries to balance the supply and demand of milk and milk products, which can vary widely from day to day.
Whether that’s actually true, or the milk marketing program is even needed, is debatable, as Hettinga’s success shows. The new law would, in effect, require Hettinga to pay his competitors to stay in business.
What an amazing show of economic ignorance. If you can stand it, there's more here.
Comments (20)
Michael Hampton
There's a reason I call it Homeland Stupidity...and you didn't even get into the best politician milk money can buy.
Published: April 17, 2006 9:20 PM
John Bigelow
The Chicago Tribune had a story on this issue a few months ago. I wrote letters to both my senators and representatives asking about this issue. None of them replied. Now I see why. They knew they were going to do something indefensible - better to just ignore any questions from constituents!
Published: April 17, 2006 9:34 PM
jeffrey
Ah, here we go: American central planning.
Published: April 17, 2006 9:38 PM
Michael Hampton
John, the Tribune story you mentioned was one that I cited and also used in the article. The Trib also had an editorial coming out against S.2120, (at least I think it was against) but I didn't feel like paying for a copy of it. :)
Published: April 17, 2006 9:40 PM
George Gaskell
Milk has been a frequent object of American protectionism and price-fixing. A disproportionate number of US Supreme Court cases concerning Congress's abuse of the Commerce Clause deal with price controls on milk.
The main, landmark case from the FDR era, of course, dealt with chickens (and there's another notorious one dealing with wheat), but milk price controls, particularly by the states, was the impetus for a surprisingly large number of exceedingly bad cases.
Published: April 17, 2006 9:47 PM
Manuel Lora
Oh, and don't forget about the impending control of farm animals:
Is there anything unregulated these days?
What is a sick disease.
Published: April 17, 2006 9:52 PM
Michael Hampton
We don't have to put RFID tags in ourselves yet, but at the moment the program is voluntary.
Published: April 17, 2006 10:21 PM
Manuel Lora
It's hard to be an optimist for liberty these days.
Published: April 17, 2006 10:31 PM
Steven Ng
I have a vision Hettinga pouring unsold milk down the drain before it spoils and slaughtering their excess cows. They will then be accused of being an evil profiteer, selling milk at artificially inflated prices to profit off of young working mothers and their malnourished children.
Published: April 17, 2006 11:26 PM
TokyoTom
Good post pointing out rent-seeking behavior in agriculture.
We have seen a vast expansion in this under the Republicans, who have managed to jerrymander themselves into a majority with very safe seats. As a result, they are in a better position to sell rents to corporates and to vote-providers, which explains the ballooning deficits and military expenditures.
Published: April 18, 2006 3:33 AM
banker
Makes sense since Republicans usually represent rural areas. Though, liberals have their own issues when it comes to stealing tax money.
Published: April 18, 2006 5:34 AM
TokyoTom
banker, I agree that liberals have their own issues about stealing tax money (Rooseveldt got it all started), but Clinton did a pretty good job at paring back the welfare state and expenses. In any case, they pale compare to the Republicans.
By the way, I'm a Republican.
Published: April 18, 2006 6:41 AM
Daniel Coleman
It's funny that if you own a company that produces milk, and if your company peacefully goes about selling the milk at the best possible price for your consumer, then men with guns will come to your door. Don't bother calling the authorities: they are the authorities.
Only in America. . .
Published: April 18, 2006 6:47 AM
Geoffrey Allan Plauche
That's messed up. Just when I start thinking I can no longer be surprised by the blatant corruption of statesmen (read state's men).
By the way, I call for a concerted effort among libertarians to invert the traditional meaning of statesman. It seems more fitting, given the two components of the word, for us to use 'statesman' and 'statesmen' for the truly dispicable politicians.
Published: April 18, 2006 7:19 AM
Yancey Ward
While I support Hettinga in his fight against this government intrusion, I do have a question: Is Hettinga taking other dairy subsidies not related to the price floor? If he is, then I don't have much sympathy for him.
Published: April 18, 2006 8:26 AM
Peter G. Klein
Yancey, the answer is Yes, of course! According to the EWG Farm Subsidy Database, Mr. Hettinga received $895,509 in federal government subsidies from 1995 to 2004. His distaste for government intervention seems to be somewhat limited.
Published: April 18, 2006 11:46 AM
Glen
Peter Klein,
Do you know anybody whose distaste for government intervention is not limited? I have yet to meet or even hear of such a person (granted I'm only 42).
Published: April 18, 2006 8:42 PM
David
This is just another example of disgusting big government that most people don't even know about or care to learn the details of.
And of course the more you vote Republicans or Democrats (or Green Party...eek) that more this type of thing will occur, because only the Libertarian party will fight against this sort of thing and do everything possible to bring it to a halt.
It just makes me sad.
Published: April 19, 2006 3:52 PM
M E Hoffer
Anyone join me in wondering whether we, by remaining within this schema, serve to draw out a longer gestation of its inevitable end, nay, make it more efficient in its plunder while it still draws breath?
Curiously...
Published: April 20, 2006 2:18 PM
Paul in NJ
I found this post while writing my own diatrible on milk price supports, by way of an article about Wisconsin forcing a gas station to raise its prices for the crime of offering discounts to certain customers.
The USDA has a pretty good primer which tries to explain the tortuous world of milk price fixing here.
Published: May 9, 2007 1:41 PM