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Originally Posted by Carn
There are three other companies that already do what he does, so obviously someone has the money.
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And they should probably modify the protections put in place before anyone else "withthe money" jumps in an further destabilizes the market.
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Originally Posted by Carn
Well, it is controlled by a group of companies who keep the prices inflated.
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They keep prices steady. It's an artificial price, but it is one determined by market forces. This is the price that keeps the market profitable enough to ensure suppliers stay in the business of suppling.
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Originally Posted by Carn
You're scared that Hettinga will raise the prices once he is a monopoly.
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No, I'm worried that the market price of milk will rise after dairy farmers get out of the business because it's no longer profitable.. because Hettinga is currently depressing the market price by expoiting a loophole not meant to protect producers of his size.
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Originally Posted by Carn
Well, they are already high, and he already has competitors who do what he does, so he obviously won't be a monopoly.
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He's also not capable of supplying all of the demand. He is, however, capable of disrupting the market enough to make the market unprofitable for traditional large suppliers who, by virtue of their size and set-up, are incapable of exploiting the same loophole Hettinga is using to shirk some of what they accept as overhead operating cost.
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Originally Posted by Carn
And? It's still cheaper.
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Other dairy producers are paying for part of his operating costs because he has crafted his operation to exploit a loophole allowing him to avoid paying membership in dairy associations. Modify the loophole so it cannot be exploited in this way and instead protects the small local producers as intended and you'll find his milk costs just as much as everyone else's/
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Originally Posted by Carn
Why doesn't he deserve them?
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His operation does not represent the type of operation intended to be protected. It meets the conditions and definitions, which is why he can exploit the loophole in this way... but you seem to be championing his process as if it is inherently superior to the alternative.
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Originally Posted by Carn
Or maybe deregulate the industry and everyone's milk is just as cheap as his.
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Sure. Which means more milk will haveto be produced to meet operating costs or sustain profits. But more milk means more supply which means lower prices. Eventually you reach a natural limit to production and then dairy farming becomes a losing preposition. People get out of the business, and prices go back up... possibly way back up. And that's not even factoring in that not all milk is Grade A. Milk destined for use as cheese or some other product brings a lower price. Have a bad year? You go out of business.
We figured out a long time ago that this sort of instability is not desirable in food markets.
I'm not interested in protecting some guy's gaming of the system so he can make a profit.