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"The upside of the current Great Recession is that it could drive a stake through the heart of the academic nostrum known as the efficient-market hypothesis."
U.S. Dairy Export Council (USDEC) stated today, February 16, 2010:
The crash of global dairy markets in mid-2008 put U.S. exports on course for a decline in 2009, ending a streak of six straight years of expansion.
Dairy export sales totaled $2.32 billion last year, down 39 percent from 2008’s record level, according to analysis of government trade data conducted by the U.S. Dairy Export Council (USDEC). However, most of the downturn reflected lower world prices; overall export volume was off just 16 percent, at 2.178 billion lbs. of milk solids (totalsolids basis), says USDEC. Export volume represented 9.3 percent of U.S. milk production in 2009, down from 11.0 percent in 2008 and 9.8 percent in 2007.
Both USDEC and NMPF like to use the concept of “total solids” which diverts attention away from imported dairy “proteins.”
One of the dairy products we export is lactose. But wait, we import lactose too! The table above, to me, is quite revealing about world trade. Sure, we export more than we import but, the theory behind trade is “comparative advantage” – some countries do better at some things and should trade in those goods.
“Absolute advantage” can occur when one country has a lower exchange rate – think New Zealand. New Zealand, when they went “cold turkey’ on dairy farm subsidies in the 80’s also allowed their currency to float. Actually, it appears they encouraged their currency to fall relative to the U.S.
Meanings of words change over time but it is interesting to note, in Gibbons v. Ogden (1824), Chief Justice John Marshall ruled: "Commerce, undoubtedly is traffic, but it is something more—it is intercourse.”