He sells milk for half the price you pay. The feds want to stop him. Why? - Tilted Forum Project Discussion Community

Randerolf · 02-19-2006, 11:36 PM

Those of you who are familiar with price controls will appriciate this piece of literature.

http://www.chicagotribune.com/news/n...ationworld-hed

Quote:

He sells milk for half the price you pay. The feds want to stop him. Why?

By Andrew Martin
Tribune national correspondent
Published February 19, 2006

YUMA, Ariz. -- Hein Hettinga is a dairy farmer but he doesn't spend his days milking cows.

Rather, Hettinga keeps a cell phone pressed to his ear to keep tabs on his empire of 15 dairy farms stretching from California to west Texas, including five massive farms in the desert east of Yuma.

But what distinguishes Hettinga from other large-scale dairy farmers is that he also bottles the milk from his Arizona farms and trucks it to stores in Arizona and Southern California. At one of them, Sam's Club in Yuma, two gallons of Hettinga's whole milk sell for $3.99.

That's the same price as a single gallon of whole milk in Chicago, which is second only to New Orleans in the cost of milk.

By controlling all stages of production, Hettinga says he can produce milk so efficiently that he and his customers can make a hefty profit at dirt-cheap prices. Such vertical integration, as it is known, is increasingly popular in agriculture as farmers and processors try to find ways to eliminate costs and increase revenues.

In the highly politicized world of dairy, efficiency could carry a price. Major dairy cooperatives and milk processors successfully persuaded federal regulators to write new rules that would prohibit the business practices that Hettinga has so successfully put in place.

Under the proposed regulations, Hettinga could continue to process his own milk only if he agrees to participate in a federally regulated pool of milk revenues, which would essentially require him to pay his competitors to stay in business. A bill that would have a similar effect is working its way through Congress.

Hettinga, an outspoken 64-year-old who emigrated from Holland to California at age 7, said the pending regulations were an effort by dairy heavyweights such as Dean Foods and the Dairy Farmers of America, the nation's largest dairy cooperative, to monopolize the milk business.

"Basically, I'm a pebble in the shoe of DFA and Dean Foods," he said. "The only reason I'm a success is they are a milk monopoly and they have raised the price too high. The consumer is getting ripped off."

Both Dean and the Dairy Farmers of America, or DFA, declined to comment for this article.

Beyond regulators' intent?

In legal briefs filed with the U.S. Department of Agriculture in 2004, lawyers for Dean Foods and DFA argued that Hettinga's operation flouted the original intent of the federal milk market order, a regulatory system created during the Great Depression to ensure a reliable milk supply and a reliable price for farmers. The regulations include an exemption for farmers who bottle their own milk, known as producer handlers.

Marvin Beshore, a lawyer for DFA, has said Hettinga's dairy takes the idea of producer handler far beyond what regulators originally envisioned, "mom and pop dairies that bottled the little milk they produced and sold to their neighbors." And he waxed apocalyptic about what would happen if other dairy farmers were allowed to follow Hettinga's lead.

He has said that if Hettinga were allowed to continue, it "will lead to the disintegration of the entire federal order system and consequently, to chaotic milk markets across the United States."

Charles English, an attorney representing Dean Foods and Shamrock Farms, a competitor of Hettinga's in Arizona, said in a 2004 brief to the USDA that Hettinga's operations had grown so large so quickly that they were depressing prices for other dairy farmers in Arizona by a penny or two per gallon.

English also argued that Hettinga had an unfair advantage over regulated milk bottlers because he didn't have to pay the federally mandated price for raw milk. The result is that Hettinga is stealing customers by offering prices that regulated processors can't match, English said.

The intense lobbying effort to curb Hettinga showcases what many, including lawyers in the Justice Department, say is an antiquated, unfair system for regulating milk. These critics question why the federal regulations are still needed, given an oversupply of milk and a burgeoning international dairy marketplace that bears little resemblance to the 1930s.

Furthermore, they argue that the rules of the federal order have allowed the giants of the dairy industry to tighten their grip on the marketplace by forcing competitors to comply with rules that favor larger outfits. Allegations that the DFA was trying to monopolize the raw milk market have prompted an ongoing anti-trust investigation by the Justice Department.

Federal milk order

Most farmers sell their milk to manufacturing plants that produce bottled milk, cheese, ice cream or other dairy products, with the highest prices typically paid for bottled milk.

To prevent undue competition, farmers are allowed to vote for a federal order to regulate the dairy industry in their region. There are 10 regions in the federal milk order; California maintains its own state-run milk order, and a few parts of the country are unregulated.

Dairy processors pay at least a USDA-set minimum price for raw milk. Milk revenues are combined in a regional pool, and farmers receive an average price. So a farmer whose milk is shipped to a cheese plant receives the same price as a farmer whose milk is bottled into gallons.

But because of the exemption for producer handlers, Hettinga has bypassed the federal milk order. If the changes to the milk order are approved, there would still be an exemption for producer handlers, but only those that produce less than 3 million pounds of milk a month--about a sixth of Hettinga's Arizona production.

"These laws have been in effect 60 years, 70 years, and they are changing the law just to do me in," said Hettinga, who has spent nearly $1.5 million on legal fees during the past four years, about $1,000 a day. "If I've got such a better system, why don't they deregulate everyone?"

Hettinga casts himself as David fighting the Goliaths of the dairy industry. But he hardly fits the caricature of the workaday farmer. With a private plane and pilot and three houses, including one overlooking the Pacific Ocean in Newport Beach, Calif., Hettinga is among the largest dairy farmers in the U.S.

Besides running his dairy farms and his two bottling plants, Hettinga also makes his own plastic milk bottles and ships the milk in his own Sarah Farms trucks. By making pennies on each step of the milk production, Hettinga said he and his customers can make a profit even when selling two gallons of whole milk for $3.99 (a two-pack of skim is $3.44).

Hettinga's size has also allowed him to wage an expensive and high-profile battle against his opponents. In addition to hiring lawyers and a lobbyist, Hettinga has plastered signs on the back of his milk trucks that read "Stop the Milk Monopolies From Raising Your Milk Prices." When Sen. Jon Kyl (R-Ariz.) supported legislation to regulate Sarah Farms, Hettinga responded by slapping a label on the side of his gallons of milk urging consumers to call Kyl's office to voice their displeasure.

It's ironic that the nation's largest dairy companies and cooperatives are fighting vertical integration by a dairy farmer. As vertical integration has become more and more popular in agriculture in the past several decades, farmers have often complained that vertical integration by major agribusiness companies such as Smithfield Foods and Tyson Foods was driving them out of business.

Hettinga has another term for it. He calls it "un-American."

"They say I have an unfair advantage, but anyone in the United States can do what I do," said Hettinga, who estimates he will have to pay $3.5 million a year to his competitors to participate in the federal pool system if the new regulations are approved.

While Hettinga says he could survive such a financial hit, three smaller producer handlers in the Northwest--Mallorie's Dairy in Oregon and Smith Brothers Farms and Edaleen Dairy in Washington state--say the new regulations could put them out of business.

Others losing revenue

Dana Coale, deputy administrator for USDA's dairy programs, said her agency's decision was based on the fact that Hettinga and other large-scale producer handlers were lowering the price that regulated dairy farmers were receiving for their milk. USDA records show an average dairy farmer in Arizona was losing annual revenue of $11,000 to $17,000 because of Hettinga.

"It is resulting in other dairy farmers having to suffer for the operations of the producer handlers," Coale said.

Though the USDA approved the recommendations, they still face a vote from farmers in the Arizona/Las Vegas milk order and another order in the Pacific Northwest. Coale said the votes should be tabulated by the end of the month.

The regulations are expected to be approved, in part because cooperatives can vote as a bloc, virtually ensuring that a dominant cooperative -- such as DFA--can control the vote.

"The federal order system is driven by people with power, and that now is the co-ops and Dean Foods," said Charlie Flanagan, business manager of Mallorie's Dairy, adding that being forced to join the federal milk pool would cost his dairy $1million a year, more than its annual profits. "They shape the rules that everybody has to play by."

alpha phi · 02-20-2006, 12:57 AM

Growing up I can remember watching the semi's
pulling up to the neighbors dairy farm,
pumping all their milk, then driving up the road,
and dumping it all in the ditch.
It's truely disgusting and wastefull.
I was told the goverment pays the milk company
to dump the milk whenever there is too much
so the price won't fall.
Instead our taxes paid to dump milk in a ditch
And people still can't afford milk

Zyr · 02-20-2006, 04:59 AM

Ok, so the guy found a way to make his milk more efficiently, and people don't like it? Too bad. It's called business. If I can do the same thing better than you, then my business should do better than yours.

yellowchef · 02-20-2006, 05:53 AM

yeah they do it with a lot of farming. I want to be an argonomist when I grow up and stop this crazy shit. Ok maybe not stop but look deep into some stupid issue like this. They do this through subsidies and such too like paying farmers not to produce a crop so the price stays stable.

Its pretty lame.

cyrnel · 02-20-2006, 06:22 AM

Subsidies are complex, and protected. Lots of money involved.

It's like a baby version of the corn/Ethanol nightmare.

Ustwo · 02-20-2006, 06:36 AM

Farmers always get odd perks from both parties, but there are other issues at work here.

Where food production comes into play, do you want a monopoly in charge? Maybe this guy can make money selling for half price, but he does so because he controlls every aspect of production. Thats great bussines but the end result of such practices is they can end up with one 'winner' in control. A DeBeers of milk if you will.

In the long run it will work out, as if he were to start getting unreasonable once he was in control of it all, others could move in again, as unlike diamonds, you can't just buy up all the claims, but in the mean time you will have a lot of farmers SOL.

Its not much different than the Walmart complaints, just that in this case there are protectionist laws to play with due to the political nature of agriculture.

Carno · 02-20-2006, 08:15 AM

Quote:

Under the proposed regulations, Hettinga could continue to process his own milk only if he agrees to participate in a federally regulated pool of milk revenues, which would essentially require him to pay his competitors to stay in business. A bill that would have a similar effect is working its way through Congress.

Atlas Shrugged, anyone?

1010011010 · 02-20-2006, 08:47 AM

So. Hettinga produces milk for half-price.
Various other dairy farmers can't compete.
Other dairy farmers go out of business.
Supply falls below demand.
Prices skyrocket.

The only winner is Hettinga. We don't create the government to protect the profits of a single individual at the expense of everyone else.

Carno · 02-20-2006, 09:00 AM

What's to stop other dairy farmers from becoming as efficient as Hettinga?

Their own incompetence?

cyrnel · 02-20-2006, 09:07 AM

Quote:

Originally Posted by 1010011010

So. Hettinga produces milk for half-price.
Various other dairy farmers can't compete.
Other dairy farmers go out of business.
Supply falls below demand.
Prices skyrocket.

The only winner is Hettinga. We don't create the government to protect the profits of a single individual at the expense of everyone else.

That's competition. If he can do it, others could too, if they weren't worried about being the other odd-man-out. Instead we're layering restrictions to protect the subsidy system. This whole thing is about protecting the good-old-boy subsidy system against a more efficient but unmanaged and possibly less stable free market. Make no mistake, we are paying for it in the form of higher prices, hopefully in exchange for something useful.

percy · 02-20-2006, 10:00 AM

I wonder if his workers benefit by profit sharing or if they are illegals working their asses off to make him rich. Either way.

Seaver · 02-20-2006, 10:05 AM

Quote:

Ok, so the guy found a way to make his milk more efficiently, and people don't like it? Too bad. It's called business. If I can do the same thing better than you, then my business should do better than yours.

Quote:

That's competition. If he can do it, others could too, if they weren't worried about being the other odd-man-out. Instead we're layering restrictions to protect the subsidy system. This whole thing is about protecting the good-old-boy subsidy system against a more efficient but unmanaged and possibly less stable free market. Make no mistake, we are paying for it in the form of higher prices, hopefully in exchange for something useful.

Do you all REALLY want a monopoly on food production? Say once they control the majority of it, they can THEN decide to hike up prices.

Or maybe decide to stop selling to a certain state because they didnt vote their way.

Or maybe make deals with certain companies that they'd only sell to them, spreading their control over any restaurant/food market.

Personally I'll pay the subsidies to protect Ma' and Pop's farm to protect against this.

Gatorade Frost · 02-20-2006, 10:07 AM

Personally I think people are too afraid of monopolies.

If this guy starts trying to throw his weight around by jacking up the price of milk, people will buy something else until other people can get back into the game (which will ultimately happen). Plus if the price gets too high and nobody buys it, he'll have to bring it back down to make a profit. Just because one person has claimover a market doesn't mean he can do whatever he wants.

xepherys · 02-20-2006, 10:19 AM

I agree with Gatorade. I mean, it's not like fuel, this is milk. People can live and do business and make money without milk. A monopoly of dairy that decides to hike prices will only result in their own loss of business. I don't see this as being an issue at all. I think government subsidies of farming were great during the depression. Hint: That was a long time ago and most people have far more money now. The consumer is being ripped off so that a company can make excess money. Hey, it's just like the oil industry. Also, if everyone is covered by a government blanket, having multiple companies does NOT mean there isn't a monopoly. The monopoly is the group, not the individual. If all companies make the same and charge the same amount (roughly), and HAVE to charge and make the same amount, is that really competition and free market?

It's just a goverment allocated monopoly. *shrug*

Zeraph · 02-20-2006, 03:45 PM

I am by no means an economist, or any specialist that would know a lot about this stuff, but why can't the government just say you can only have a 20% profit max? (meaning if you monopolize so that later you can jack up the prices, it would be pointless since you could never jack the price up past earning a 20% profit) No more waste, and things will get cheaper and cheaper as the proceses are refined.

Craven Morehead · 02-20-2006, 03:57 PM

20% profit is peanuts in some industries.

Zeraph · 02-20-2006, 04:00 PM

You get the idea, it could be modified based on industry. Or a better overall number.

1010011010 · 02-20-2006, 04:35 PM

Quote:

Originally Posted by cyrnel

That's competition. If he can do it, others could too, if they weren't worried about being the other odd-man-out. Instead we're layering restrictions to protect the subsidy system. This whole thing is about protecting the good-old-boy subsidy system against a more efficient but unmanaged and possibly less stable free market. Make no mistake, we are paying for it in the form of higher prices, hopefully in exchange for something useful.

What more properly serves the purpose of the government? To ensure a free-market exists for all products with no accountability to market stability... or to ensure that the people have a relatively assured supply of food at steady, predictable prices?

"I'm hungry, mommy. Why don't we have anything to eat?"
"Market instability, honey, go back to bed. Save your energy."

Also, it's not like this guy started with a couple of cows on his family Farm in Iowa and has grown into the vertically integrated dairy powerhouse he is today by Good Ol' American Go-Get-It-iveness. This guy made a bunch of money elsewhere, saw a way to avoid a bunch of artificially imposed fees and restrictions in the dairy industry, and bought his way into the field exploiting the previously identified loophole to undercut competition while still making a profit. So they're closing the loophole he's exploiting so he, like any other large milk producer, has to pay his dues for quality control inspections and health agency oversight.

Carno · 02-20-2006, 05:08 PM

Quote:

Originally Posted by 1010011010

What more properly serves the purpose of the government? To ensure a free-market exists for all products with no accountability to market stability... or to ensure that the people have a relatively assured supply of food at steady, predictable prices?

"I'm hungry, mommy. Why don't we have anything to eat?"
"Market instability, honey, go back to bed. Save your energy."

Also, it's not like this guy started with a couple of cows on his family Farm in Iowa and has grown into the vertically integrated dairy powerhouse he is today by Good Ol' American Go-Get-It-iveness. This guy made a bunch of money elsewhere, saw a way to avoid a bunch of artificially imposed fees and restrictions in the dairy industry, and bought his way into the field exploiting the previously identified loophole to undercut competition while still making a profit. So they're closing the loophole he's exploiting so he, like any other large milk producer, has to pay his dues for quality control inspections and health agency oversight.

Oh please, don't be so melodramatic. What's stopping the other dairy producers from integrating vertically? What did he do that nobody else can do? Why don't you understand that the industry already is controlled by a monopoly? Why in the hell are you advocating higher prices? His milk is CHEAPER. The article states that there are three other companies that do what he does.

All this is is big businesses bitching about being beaten by a guy with a better system.

1010011010 · 02-20-2006, 05:32 PM

Quote:

Originally Posted by Carn

Oh please, don't be so melodramatic. What's stopping the other dairy producers from integrating vertically?

Being farmers, they don't have a lot of free cash laying around to buy the capital required.

Quote:

Originally Posted by Carn

What did he do that nobody else can do?

Buy his way into the industry.

Quote:

Originally Posted by Carn

Why don't you understand that the industry already is controlled by a monopoly?

Why don't you understand that this industry is already controlled, but not by a monopoly (unless you consider the government a monopoly), and it is regulated for a very good set of reasons.

Quote:

Originally Posted by Carn

Why in the hell are you advocating higher prices? His milk is CHEAPER.

No, his milk just doesn't include the various fees and dues you find included in the prices of other milk produced in volumes that exploit economies of scale. He avoids these fees and dues by exploiting loopholes put in place to protect small local operators from being burdened by these fees. Now that he's a big, producer, though, he doesn't deserve the artifical protection of not having to pay to particiapte.

Quote:

Originally Posted by Carn

The article states that there are three other companies that do what he does.
All this is is big businesses bitching about being beaten by a guy with a better system.

It's only better because it exploits regulatory loopholes. Modify the loophole so it can't be exploited in this way and his milk suddenly costs just as much as everyone elses.

Justsomeguy · 02-20-2006, 07:07 PM

price control in this industry is good. In other markets it degrades economics whereas in this market, it creates healthy competition.

In this case, the price control actually provides him a means of competition that would otherwise not exist.

Added that the situation being described as a monopoly above is not even a monopoly. A good example of a monopoly can be seen in cable companies of the past and even many now. Where I grew up and still live, there was only one provider. In fact because of local law only one company is even legally able to provider the service.

oiekeooiyw · 02-20-2006, 08:01 PM

I am in no way an expert, but I do recall that about 10 years ago (last time I really paid attention to govt subsidies) farmers would leave fields unplanted because they received more money from the government to not produce grain products then they would receive if they paid to plant fields, harvest and ship to distributors.
Like many laws we still have this may be one that served a purpose when it was passed, but may need to be reviewed.

Carno · 02-20-2006, 08:07 PM

Quote:

Originally Posted by 1010011010

Being farmers, they don't have a lot of free cash laying around to buy the capital required.Buy his way into the industry.

There are three other companies that already do what he does, so obviously someone has the money.

Quote:

Why don't you understand that this industry is already controlled, but not by a monopoly (unless you consider the government a monopoly), and it is regulated for a very good set of reasons.

Well, it is controlled by a group of companies who keep the prices inflated. You're scared that Hettinga will raise the prices once he is a monopoly. Well, they are already high, and he already has competitors who do what he does, so he obviously won't be a monopoly.

Quote:

No, his milk just doesn't include the various fees and dues you find included in the prices of other milk produced in volumes that exploit economies of scale.

And? It's still cheaper.

Quote:

He avoids these fees and dues by exploiting loopholes put in place to protect small local operators from being burdened by these fees. Now that he's a big, producer, though, he doesn't deserve the artifical protection of not having to pay to particiapte.

Why doesn't he deserve them?

Quote:

It's only better because it exploits regulatory loopholes. Modify the loophole so it can't be exploited in this way and his milk suddenly costs just as much as everyone elses.

Or maybe deregulate the industry and everyone's milk is just as cheap as his.

stevo · 02-21-2006, 05:49 AM

I agree with Carn 100% on this one. The only reason milk costs as much as it does in because of depression-era regulations. This guy found a way to produce milk more efficiently and passes the savings on to you. He does it, as well as 3 other dairy farmers. I have no doubt with the regulations removed even more farmers would be able vertically integrate. We would end up with more smaller players and less big producers and regional milk markets would develop. Milk would be more or less expensive relative to other areas in the nation, but all the prices would be cheaper than they currently are.

I find it interesting that often the same people that complain about big-corporate handouts also complain that we should keep the milik industry regulated.

snowy · 02-21-2006, 07:50 AM

I have no problem with deregulation/desubsidization of agriculture. If we are supposed to have a free economy, we need to quit the handouts. That said, I think even the farmers who are scared of Hettinga can remain competitive without subsidies. Furthermore, I don't think price controls on milk are necessary. People need milk? (No one really needs milk, by the way, the dairy lobby has persuaded us that we do.) That would be why we have WIC (Women, Infants, and Children: it provides milk, cheese, bread, and cereal to those with low incomes).

The dairy lobby is far too powerful in this country; it's much the same with the cattlemen's lobby and other agricultural lobby groups. It's time we took away some of that power and increased competition in this market. As for some who would claim "What about the small farmer?"--no dairy farmer is a "small" farmer any more. Most are part of larger co-ops, and therefore have the capability to compete with a guy like Hettinga.

Besides, as a consumer, I prefer to buy my milk locally, and am willing to pay a little more for the privilege. I think most people (at least in my neck of the woods) are willing to do the same.

pattycakes · 02-21-2006, 03:47 PM

3+ bucks for a gallon of milk is insane... PERIOD. I could get a cow, feed it, house it... and probably come out with milk formyself at 1.50 2.00 a gallon.... everyfamily needs a damn cow..... i dont think it would go over well in my apartment but i shall try

1010011010 · 02-22-2006, 07:27 PM

Quote:

Originally Posted by Carn

There are three other companies that already do what he does, so obviously someone has the money.

And they should probably modify the protections put in place before anyone else "withthe money" jumps in an further destabilizes the market.

Quote:

Originally Posted by Carn

Well, it is controlled by a group of companies who keep the prices inflated.

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.

Quote:

Originally Posted by Carn

You're scared that Hettinga will raise the prices once he is a monopoly.

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.

Quote:

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.

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.

Quote:

Originally Posted by Carn

And? It's still cheaper.

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/

Quote:

Originally Posted by Carn

Why doesn't he deserve them?

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.

Quote:

Originally Posted by Carn

Or maybe deregulate the industry and everyone's milk is just as cheap as his.

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.

pattycakes · 03-02-2006, 03:34 AM

everyone here would buy his milk if it was sold near them. getting twice as much as a consumer, cannot be beat. you may say it is wrong, but when it comes down to it 3+bucks kept in your pocket is 3bucks

Yakk · 03-02-2006, 08:47 AM

The arguement for a nationally regulated agriculture system that makes the most sense is that of national security.

Not having enough food is a matter of national security -- people don't care about having twice as much food, but they care a whole bunch about having half as much food. So ensuring that there is always "more than enough" food is important.

What if they required that every food producer "keep a stockpile" of 1 or 2 years production availiable in the case of emergency? It wouldn't have to be the same food, but it could be a substute (ie, powered milk instead of milk) And possibly you would allow producers to contract out such a stockpile.

The more stable your supply, the less of a buffer required. Possibly farmers would only have to keep a 1 year stockpile availiable, while importers would have to keep a 2 year stockpile availiable (on US soil).

In the event of a food shortage, the US government could allow (or require) stockpiles to be depleted and reduce the impact on prices. So while fresh food would become more expensive, preserved food would become cheap, making starvation unlikely.

Exorcist · 03-06-2006, 11:00 PM

This country needs less price-gouging. People whould realize that when prices go down, people get paid less, and therefore spend less money. Spending less money puts the economy into a downward spiral, People lose jobs. It may not seem like much, until it happens to you.

02-20-2006, 12:57 AM	#2 (permalink)
alpha phi seeker Location: home	Growing up I can remember watching the semi's pulling up to the neighbors dairy farm, pumping all their milk, then driving up the road, and dumping it all in the ditch. It's truely disgusting and wastefull. I was told the goverment pays the milk company to dump the milk whenever there is too much so the price won't fall. Instead our taxes paid to dump milk in a ditch And people still can't afford milk __________________ All ideas in this communication are sole property of the voices in my head. (C) 2005, 2006, 2007, 2008, 2009 "The Voices" (TM). All rights reserved.

02-20-2006, 04:59 AM	#3 (permalink)
Zyr Crazy Location: Hamilton, NZ	Ok, so the guy found a way to make his milk more efficiently, and people don't like it? Too bad. It's called business. If I can do the same thing better than you, then my business should do better than yours. __________________ "Oh, irony! Oh, no, no, we don't get that here. See, uh, people ski topless here while smoking dope, so irony's not really a high priority. We haven't had any irony here since about, uh, '83 when I was the only practitioner of it, and I stopped because I was tired of being stared at." Omnia mutantu, nos et mutamur in illis. All things change, and we change with them. - Neil Gaiman, Marvel 1602

02-20-2006, 05:53 AM	#4 (permalink)
yellowchef Addict Location: Shalimar, FL	yeah they do it with a lot of farming. I want to be an argonomist when I grow up and stop this crazy shit. Ok maybe not stop but look deep into some stupid issue like this. They do this through subsidies and such too like paying farmers not to produce a crop so the price stays stable. Its pretty lame. __________________ the voices in your head are not real--but they still have some really great ideas. always remeber you can choose your friends, but you can't choose your family. But..you CAN choose the insane asylum where you have them all put away!

02-20-2006, 06:22 AM	#5 (permalink)
cyrnel Adequate Location: In my angry-dome.	Subsidies are complex, and protected. Lots of money involved. It's like a baby version of the corn/Ethanol nightmare. __________________ There are a vast number of people who are uninformed and heavily propagandized, but fundamentally decent. The propaganda that inundates them is effective when unchallenged, but much of it goes only skin deep. If they can be brought to raise questions and apply their decent instincts and basic intelligence, many people quickly escape the confines of the doctrinal system and are willing to do something to help others who are really suffering and oppressed." -Manufacturing Consent: Noam Chomsky and the Media, p. 195

02-20-2006, 06:36 AM	#6 (permalink)
Ustwo Pissing in the cornflakes	Farmers always get odd perks from both parties, but there are other issues at work here. Where food production comes into play, do you want a monopoly in charge? Maybe this guy can make money selling for half price, but he does so because he controlls every aspect of production. Thats great bussines but the end result of such practices is they can end up with one 'winner' in control. A DeBeers of milk if you will. In the long run it will work out, as if he were to start getting unreasonable once he was in control of it all, others could move in again, as unlike diamonds, you can't just buy up all the claims, but in the mean time you will have a lot of farmers SOL. Its not much different than the Walmart complaints, just that in this case there are protectionist laws to play with due to the political nature of agriculture. __________________ Agents of the enemies who hold office in our own government, who attempt to eliminate our "freedoms" and our "right to know" are posting among us, I fear.....on this very forum. - host Obama - Know a Man by the friends he keeps.

02-20-2006, 08:47 AM	#8 (permalink)
1010011010 Psycho Location: Virginia Beach, VA	So. Hettinga produces milk for half-price. Various other dairy farmers can't compete. Other dairy farmers go out of business. Supply falls below demand. Prices skyrocket. The only winner is Hettinga. We don't create the government to protect the profits of a single individual at the expense of everyone else. __________________ *Simple Machines in Higher Dimensions*

02-20-2006, 09:00 AM	#9 (permalink)
Carno Junkie	What's to stop other dairy farmers from becoming as efficient as Hettinga? Their own incompetence? __________________ http://how-to-spell-ridiculous.com/

02-20-2006, 10:00 AM	#11 (permalink)
percy Addict	I wonder if his workers benefit by profit sharing or if they are illegals working their asses off to make him rich. Either way.

02-20-2006, 10:07 AM	#13 (permalink)
Gatorade Frost Rookie	Personally I think people are too afraid of monopolies. If this guy starts trying to throw his weight around by jacking up the price of milk, people will buy something else until other people can get back into the game (which will ultimately happen). Plus if the price gets too high and nobody buys it, he'll have to bring it back down to make a profit. Just because one person has claimover a market doesn't mean he can do whatever he wants. __________________ I got in a fight one time with a really big guy, and he said, "I'm going to mop the floor with your face." I said, "You'll be sorry." He said, "Oh, yeah? Why?" I said, "Well, you won't be able to get into the corners very well." Emo Philips

02-20-2006, 10:19 AM	#14 (permalink)
xepherys <3 TFP Location: 17TLH2445607250	I agree with Gatorade. I mean, it's not like fuel, this is milk. People can live and do business and make money without milk. A monopoly of dairy that decides to hike prices will only result in their own loss of business. I don't see this as being an issue at all. I think government subsidies of farming were great during the depression. Hint: That was a long time ago and most people have far more money now. The consumer is being ripped off so that a company can make excess money. Hey, it's just like the oil industry. Also, if everyone is covered by a government blanket, having multiple companies does NOT mean there isn't a monopoly. The monopoly is the group, not the individual. If all companies make the same and charge the same amount (roughly), and HAVE to charge and make the same amount, is that really competition and free market? It's just a goverment allocated monopoly. shrug

02-20-2006, 03:45 PM	#15 (permalink)
Zeraph Banned Location: The Cosmos	I am by no means an economist, or any specialist that would know a lot about this stuff, but why can't the government just say you can only have a 20% profit max? (meaning if you monopolize so that later you can jack up the prices, it would be pointless since you could never jack the price up past earning a 20% profit) No more waste, and things will get cheaper and cheaper as the proceses are refined.

02-20-2006, 03:57 PM	#16 (permalink)
Craven Morehead Custom User Title	20% profit is peanuts in some industries.

02-20-2006, 04:00 PM	#17 (permalink)
Zeraph Banned Location: The Cosmos	You get the idea, it could be modified based on industry. Or a better overall number.

02-20-2006, 07:07 PM	#21 (permalink)
Justsomeguy Insane	price control in this industry is good. In other markets it degrades economics whereas in this market, it creates healthy competition. In this case, the price control actually provides him a means of competition that would otherwise not exist. Added that the situation being described as a monopoly above is not even a monopoly. A good example of a monopoly can be seen in cable companies of the past and even many now. Where I grew up and still live, there was only one provider. In fact because of local law only one company is even legally able to provider the service. Last edited by Justsomeguy; 02-20-2006 at 07:12 PM..

02-20-2006, 08:01 PM	#22 (permalink)
oiekeooiyw Insane	I am in no way an expert, but I do recall that about 10 years ago (last time I really paid attention to govt subsidies) farmers would leave fields unplanted because they received more money from the government to not produce grain products then they would receive if they paid to plant fields, harvest and ship to distributors. Like many laws we still have this may be one that served a purpose when it was passed, but may need to be reviewed.

02-21-2006, 05:49 AM	#24 (permalink)
stevo Rail Baron Location: Tallyfla	I agree with Carn 100% on this one. The only reason milk costs as much as it does in because of depression-era regulations. This guy found a way to produce milk more efficiently and passes the savings on to you. He does it, as well as 3 other dairy farmers. I have no doubt with the regulations removed even more farmers would be able vertically integrate. We would end up with more smaller players and less big producers and regional milk markets would develop. Milk would be more or less expensive relative to other areas in the nation, but all the prices would be cheaper than they currently are. I find it interesting that often the same people that complain about big-corporate handouts also complain that we should keep the milik industry regulated. __________________ "If I am such a genius why am I drunk, lost in the desert, with a bullet in my ass?" -Otto Mannkusser

02-21-2006, 07:50 AM	#25 (permalink)
snowy Kick Ass Kunoichi Location: Oregon	I have no problem with deregulation/desubsidization of agriculture. If we are supposed to have a free economy, we need to quit the handouts. That said, I think even the farmers who are scared of Hettinga can remain competitive without subsidies. Furthermore, I don't think price controls on milk are necessary. People need milk? (No one really needs milk, by the way, the dairy lobby has persuaded us that we do.) That would be why we have WIC (Women, Infants, and Children: it provides milk, cheese, bread, and cereal to those with low incomes). The dairy lobby is far too powerful in this country; it's much the same with the cattlemen's lobby and other agricultural lobby groups. It's time we took away some of that power and increased competition in this market. As for some who would claim "What about the small farmer?"--no dairy farmer is a "small" farmer any more. Most are part of larger co-ops, and therefore have the capability to compete with a guy like Hettinga. Besides, as a consumer, I prefer to buy my milk locally, and am willing to pay a little more for the privilege. I think most people (at least in my neck of the woods) are willing to do the same. __________________ If I am not better, at least I am different. --Jean-Jacques Rousseau

03-02-2006, 08:47 AM	#29 (permalink)
Yakk Wehret Den Anfängen! Location: Ontario, Canada	The arguement for a nationally regulated agriculture system that makes the most sense is that of national security. Not having enough food is a matter of national security -- people don't care about having twice as much food, but they care a whole bunch about having half as much food. So ensuring that there is always "more than enough" food is important. What if they required that every food producer "keep a stockpile" of 1 or 2 years production availiable in the case of emergency? It wouldn't have to be the same food, but it could be a substute (ie, powered milk instead of milk) And possibly you would allow producers to contract out such a stockpile. The more stable your supply, the less of a buffer required. Possibly farmers would only have to keep a 1 year stockpile availiable, while importers would have to keep a 2 year stockpile availiable (on US soil). In the event of a food shortage, the US government could allow (or require) stockpiles to be depleted and reduce the impact on prices. So while fresh food would become more expensive, preserved food would become cheap, making starvation unlikely. __________________ Last edited by JHVH : 10-29-4004 BC at 09:00 PM. Reason: Time for a rest.

03-06-2006, 11:00 PM	#30 (permalink)
Exorcist Upright	This country needs less price-gouging. People whould realize that when prices go down, people get paid less, and therefore spend less money. Spending less money puts the economy into a downward spiral, People lose jobs. It may not seem like much, until it happens to you.