The Dairy Crisis

September 21, 2018

by John McClaughry

New England dairy farmers are suffering from chronically low milk prices that threaten to drive many more out of business.  Part of this is due to changing consumer preferences, part of it to shrinking world markets for US dairy products,  but the overall cause is overproduction in the face of constant or shrinking demand.,

The dairy industry has tried all sorts of plans over the years to reduce overproduction, such as the whole herd buyout of the 1980s. It has tried government price fixing to drive up prices through the Dairy Compact of the 1990s.

The consumer preferences shift can’t readily be dealt with. I was startled to see a full page ad in Forbes, the business magazine, this week, captioned “Au Revoir, Middleman.” It argues that lower consumer prices can be attained by selling direct to customers, who, for example, buy household products from Amazon instead of a local retail middleman.

So the advertiser, named Oatly,  got the idea of bypassing the leading middleman in the dairy industry, the cow.

Oatly is marketing what it somewhat speciously calls “oatmilk”. Instead of feeding oats to a cow and taking the cow’s milk, it’s bypassing the bovine processor making the milk, or whatever it should be called, and making it in a factory. I have no idea what the liquid tastes like or what it costs, but they’re pushing it as “no dairy, no nuts, no gluten.”

I wish I had a magic bullet to save family dairy farms, but I don’t.

John McClaughry is vice president of the Ethan Allen Institute.

{ 1 comment… read it below or add one }

Deanne September 22, 2018 at 3:56 pm

Since I no longer have my cow, although I hope to get one again some day, my method of eliminating the dairy middleman is to go directly to my local organic dairy farm and fill my jars with local, organic, raw, mostly grass-fed milk from the bulk tank. I pay for my milk in a cup. Even if I pay the same price, I would rather the farmer get the money than a processing facility that hauls the milk, pasteurizes it, maybe homogenizes it, and then hauls it to a store.

My cheese purchases are a little more distant, but I purchase cheese in bulk, directly from the farm family that makes the cheese. The farm is organically managed (more important to me that the farce of “USDA organic”) and 100% grass-fed. It is also delicious. I usually buy 9 5-pound blocks at a time. Five pounds lasts me, a single person, about a month. Sometimes others go in on an order with me. When my cheese is getting low, I place another order. The farm family gets the whole purchase amount, as they should. I pay for shipping from a few states away.

I think we would all be better off if many, if not most, things were done on a much smaller scale. It is not natural to have hundreds of cows crowded into one small area. A better option would be for there to be a cow at every other home. Okay, I know it is much more “efficient” to “subcontract” our dairy needs to a large commercial business so we can spend hours per day sitting on soft couches watching useless television shows and morality-undermining movies or doing other entertaining, amusing, or “fun” activities – anything besides doing useful work or learning character-producing skills and information.

As for me, I’d rather be milking a cow and picking my own vegetables outside my front door. For now, I buy my milk and cheese directly from individual people and families I trust.

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The Ethan Allen Institute is Vermont’s free-market public policy research and education organization. Founded in 1993, we are one of fifty-plus similar but independent state-level, public policy organizations around the country which exchange ideas and information through the State Policy Network.
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