As a friend raised on a beef farm often said, "milk doesn't come from the grocery store."

By Andrew Wagner OnMilwaukee.com Staff Writer E-mail author More articles by Andrew Wagner

Published May 29, 2007 at 8:46 a.m.

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Posted by Buddy Lee on May 30, 2007 at 6:10 a.m. (report)

As an owner of a small family farm, I can tell you that the milk prices still have a ways to go before they can offer many sustainable dairies a fair price for their product. The market has been manipulated for so long by corporate ag interests, that it's unlikely small producers will survive without "going niche" (organic, artisan cheese, etc.). The longterm tragedy is playing out as we speak as mega-dairies pollute the environment, contaminate the ground water, and engage in questionable employment tactics. Interested citizens should contact their state representatives and voice concerns over these unsustainable large-scale operations. Let them know that you don't mind paying a little bit more to support the state's legacy farmers and protect and renew our precious natural resources.

Posted by ChateauDweller on May 29, 2007 at 10:50 a.m. (report)

Interesting how you compare the rising price of mile and the rising price of gasoline. It is very likely these price shifts have been caused by the same market effect--state and federal corn ethanol mandates. Our government, with their great wisdom, thought it would be "beneficial" to require gasoline to contain various percentages of energy produced from corn. This policy shift was not out of concern for your stereotypical farmer, identified in your blog, but it was caused from the powerful corporate agriculture lobby. They wanted increased demand for corn, and they got it. It should also be noted that corn ethanol is a terrible fuel. The energy cost to produce one unit is almost the same as the energy output. This is why corn and corn ethanol producers lobbied for the mandates; otherwise, there would be no market for corn ethanol. It has also been shown that ethanol made from sugar is a much better investment, as it yields much higher and profitable energy without government mandates and subsidies. Of course, this artificial market effect has inflated the price of corn and the cost of raising corn-eating livestock. Expect higher dairy prices in the future as the price of corn continues to rise. It will become more and more expensive for dairy farmers to feed their cows corn, and some dairy farmers will shift to growing corn instead of "growing milk" because the market price is higher. In turn, less cows means additional dairy price increases. As well, the increase in the price of dairy products does not mean the dairy farmers are better off. The increased price comes from the increased cost of producing milk (corn feed), not increased demand for milk. Depending on the characteristics of the market demand for dairy products, as the price increases, demand will fall, which may mean less revenue for the farmers. The effects of the ethanol mandates have yet to fully materialize, but this is what you get when you let the government intervene in a market that is functioning properly---many unintended consequences.

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