Bad Economy Lowers The Price Of Milk…

Does it seem like the price for a gallon of milk has gone down recently? That’s because in many areas it has. The reports are claiming that a bad economy has caused consumers to buy less milk. This slump may ultimately help dairy farmers in Minnesota and the Midwest area; it will hurt dairy farmers in Georgia, in the west, and other areas.

In some areas milk prices have gone down from fifty cents a gallon, to almost a dollar a gallon. This has left some small dairy farmers hurting.

As consumers, we are very happy to see milk prices finally coming down. But, I must admit, I’m a little confused about the madness of American milk prices.

Haven’t the last couple of years brought soaring milk prices? I was often asking myself, how did the price of milk get to $4 to $5 a gallon? What is the deal with that? And now, the prices are falling rapidly? Sounds a bit like the gas industry, right?

It appears that the dairy industry was under investigation for price fixing, in September of 2008. According to a Wall Street Journal report, the dairy industry is being accused of illegal maneuvering to raise the prices.

And in June of 2008, the New York City Council issued a report that charged milk retailers with price gouging.

A survey conducted by the state of New York discovered that a gallon of whole milk had increased nearly 30% between 2006 and 2007 in certain metropolitan areas.

An investigation concluded that 86% of the stores being surveyed were charging more for milk than what they should have; and most of these were selling forty cents more per unit than what was tolerable.

Another survey in San Francisco reveals that large supermarket chains were charging 28% higher than the national average for a gallon of milk. This was taken June of 2004.

Just how many retailers are overcharging consumers for milk products across the nation? Why isn’t there more enforcement to help consumers?

And why is it that the U.S. government keeps giving subsidies to dairy farmers to artificially inflate milk prices? Are the lobbying efforts by the dairy industry paying off? (Excuse me, I thought the dairy industry was hurting.)

The coalition of dairy farmers across America have benefited from government support for almost 70 years. This has crushed independent farmers that have chosen to undersell the competition, and help the consumer, keeping dairy prices as low as possible.

The Milk Regulatory Equity Act of 2005, has allowed legislators to actually target independent dairy farmers that are only guilty of selling at lower prices than the competition. “Big Milk” wins again.

And to think that just a couple of big people are controlling the milk industry in America. All along I had thought that the milk industry was a free market system. So much for that logic…

Got milk?