EDITORIAL: Big Milk: A raw deal for consumers

Beverage socialism sours the marketplace

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When it comes to milk, government isn’t interested in your health. The red tape imposed on this breakfast favorite isn’t just there to ensure dairy products aren’t spoiled. Rather, the rules intentionally limit competition and keep prices high. In this crony capitalist venture, consumers are the ones being milked.

Last month, the Louisiana Department of Agriculture and Forestry discovered that the Fresh Markets grocery chain committed the crime of having a sale on milk. As part of a promotional deal, the retailer advertised a gallon of milk for $2.99, which falls below the government-mandated markup of 6 percent above invoice and shipping price.

“They can sell it 6 percent over cost all day long. It’s when they sell it below cost that it becomes a problem,” State Agriculture and Forestry Commissioner Mike Strain told the Baton Rouge Advocate. The government forced the store to end the promotion and raise prices.

Fans of big government who think regulations are there to “help the consumer” ought to take notice. Milk manipulation has been in place since the New Deal, when the dairy industry and government regulators began their collusion. Congress created “marketing order” rules setting minimum prices that dairy processors must pay to dairy farmers in certain regions. Almost two-thirds of milk is produced under federal marketing orders, and most of the rest is produced under similar state schemes such as Louisiana’s.

The orders limit competition by stopping entrepreneurs from supplying milk at less than the government-set prices. Those who try to undercut the market wind up with the milk police knocking at their door. As if limiting competition were not enough, the government also guarantees prices for cheese, butter and dry milk from processors. Congress addressed this issue in 2002 and made things worse by adding taxpayer-funded cash payments to farmers when market prices fell.

The power of Big Milk has been on full display with a number of small farms and cooperatives being forced to close by order of government regulators. There has been an increase in demand for unprocessed and natural foods, including raw milk and cheese, as consumers believe these traditional items are a healthier option. Bureaucrats want to put a stop to that. On Jan. 25, the Morningland Dairy in Missouri was raided and $250,000 worth of unpasteurized cheese was confiscated and destroyed. The state refused an independent laboratory test to verify whether the product was actually contaminated in any way. Last year, police arrested the owners of a Venice Beach, Calif., health food market for selling raw milk and raw milk products.

The notion of small family farms being closed at the point of a gun for the crime of selling milk from a cow is not the sort of thing that should happen in a free country. While actions are being taken in the name of food safety, the price-fixing mechanisms suggest this is a sop to the milk industry. The milk monopoly is a sour deal for consumers and should be put out to pasture.

The Washington Times

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