Milk drinkers to be skimmed

You probably didn’t think that there was a separate zone of the Fiscal Cliff (Reg. U.S. Pat. Off.) for dairy products. It has nothing to do, I assure you, with dietary laws; it’s just politics as usual, as usual:

Come Jan. 1, there is a threat that milk prices could rise to $6 to $8 a gallon if Congress does not pass a new farm bill that amends farm policy dating back to the Truman presidency.

At this point, you should be asking yourself, not “Why is a farm policy from 1949 still on the books?” but “Why do we have farm policy in the first place?”

Under the current program, the government sets a minimum price to cover dairy farmers’ production costs. If the market price drops below that, the government buys dairy products from farmers to buoy prices and increase demand. Since milk prices have remained above that minimum price in recent years, dairy farmers usually do better by selling their products commercially rather than to the government.

But if 1949 rules go into effect, the government would be required to buy dairy products at around $40 per hundredweight — roughly twice the current market price — to drive up the price of milk to cover dairy producers’ cost.

And that, of course, is why we have farm policy in the first place: to pretend that we’re guaranteeing a living to individual farmers. It’s why Uncle Sam will always drink your milkshake.

(Via the Consumerist.)

1 comment

  1. Tatyana »

    23 December 2012 · 10:04 am

    Milk drinkers (and especially no-milk-drinkers) ARE being skimmed, all the way since 1949 – by paying subsidies to farmers through their taxes.

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