Friday, June 26, 2009

Uncharted Waters

(click on graph to enlarge)

If you look at the above graph, which covers more than five years, one obvious conclusion which can be reached by urban based policy makers, California dairy producers are willing to produce more milk with a complete disregard for profit.

Therefore, it should be small wonder that state and federal governments are perfectly willing to do nothing while lending a sympathetic ear.

This is not a market based system. The driver of production has been external capital provided by the real estate bubble. California production is now falling.

Policy makers need to understand the age of predictability is over. Dairy policy can no longer be based on unfounded assumptions.

1 comment:

  1. Isn't it so true what we learn here?
    Most of our politicians and dairy leaders are all too willing to say that they can't do much for the dairy industry until "supply and demand" equal out. But some politicians are more than willing to pass legislation that is billed as a way to limit a minuscule amount of invisible gas, at what may be a huge price to the folks they are suppose to be looking out for.
    Maybe we could get some bail-out money if we persuade Secretary Geithner that the dairy industry is too big to fail?
    On second thought we would probably be much better-off without any bail-out money and without the welfare payment we know as MILC. I think we all want the same thing; fair prices.
    Jeff Suehring