“Market” is another term which seems to have lost any original meaning and now, again, is just a substitute for good/bad.
International Dairy Foods Association (IDFA) is very concerned about how the $350 million in the Sanders amendment is used:
http://www.idfa.org/news/stories/2009/09/sanders_0908.cfm
IDFA is particularly concerned about “market distortion.”
F.A. Hayek won the 1974 Noble Prize for economics said:
“The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess.”
So, just how close to conservative economist F.A. Hayek's important concept of dispersed knowledge is the dairy market? Not very.
The Commodities Futures Trading Commission (CFTC) regularly publishes a report on futures trading: http://www.cftc.gov/dea/futures/deacmelf.htm
More than 50% of the open interest in class III milk futures is held by 8 or less (sic) traders. There are about 50,000 dairy farms in this country, all of whom hold “bits” of knowledge but the ‘knowledge” held by “8 or less” rules.
While 50,000 dairy farms go through some kind of economic fire and brimstone, IDFA and NMPF are worried that the “8 or less” will lose their iron grip.
I would suggest that the real distorters of the "market" are those who are represented by IDFA.
Excellent post Mr. Bunting.
ReplyDeleteRobert, if you read this I also agree with your last comments.
Dairy farmers do not discriminate. We feed everyone, regardless of their political associations, we don't care if they think themselves liberal or conservative, regardless of their race, color or religion, no matter their age or gender.
The dairy farmer, on the other hand, is often taken advantage of and discriminated against. This generally corrupt "pricing system" that has evolved, has been sold to us as always having the best interest of the farmer in mind. However this "system" really is not for the betterment of the farmers at all, but instead is heavily slanted to the advantage of the processors and traders (who in many cases can pass along much of their extra cost to the consumer). In my view, this system is laden with market manipulation an corruption by the few dairy traders or "Speculators" whose job is to make money through the manipulation of prices - keep in mind that they supply no salable goods to anyone, anywhere, at anytime. Yet our livelihoods and ability to provide our families with basic necessities is largely in their hands. Truth is we are ruled by a world we don't understand, yet we fear we can do nothing to change it. We have given our privilege of thinking to people who care very little (if at all) about us... Until there comes a time that enough of us regain our reason, we will not be free of this tyranny.
Jeff Suehring
Money Pit Acres