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According to theory, prices move forward in capitalism. That is just the exact opposite in pricing raw farm milk from manufactured dairy products.
However, if wholesale manufactured prices are going to be used then why should skim milk powder (SMP)not be included? Lets just say, there is no test which can distinguish NFDM from SMP.
SMP is primarily made for export and when you look at the export prices, the answer becomes apparent - SMP is priced higher. The raw milk going to SMP is priced as if it were going to NFDM.
The difference is $0.102 per pound, using CDFA prices. Adds up to millions of dollars.
John,
ReplyDeleteWhile I share your frustration over the problems in milk pricing, I wonder why you put the snide remark concerning capitalism when there is nothing about the dairy markets in the U.S. that are even close to free market in nature. Free markets require at least these three components. They must be free of government involvement, there has been much government involvement in the dairy markets since the Ag. adjustment act of 1937.
A stable currency, our dollar has had its purchasing power destroyed ever since the Federal Reserve Act of 1913 to the place where today's dollar is worth about 2 cents in 1913 currency.
A free market needs a natural growing population meaning we need a birth rate at or above 2.1 children for each woman of child bearing age. If we exclude immigrates both legal and illegal. Our natural birth rate is 1.88. Which means we are disappearing as a Caucasian nation of European descent. Credit Abortion
We have nothing today in the U.S.that looks like a free market for the dairy industry.
Respectfully,
Jeff Burdick Sr.
John, For capitalism to work fairly, there must be some transparency, and freedom to move products to their best markets. I have not seen you mention, "DPAC- Dairy Policy Action Coalition", as a movement by grassroots dairymen who are trying to bring change to how we price our raw milk. I believe now is the time to design a new marketing system for the 21st century, to better serve us in the global economy we now must compete in. DPAC seems to be the only group that see's the potential for gain, while the rest want to live in their past with various supply management schemes, and more government intervention. J.B. Minn.
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