Grim's Hall: Blessed be the cheesemakers

Federal and state governments set a floor on the price of milk that costs American consumers about $5 billion a year, while protecting dairy farmers from the price repercussions of a chronic oversupply of milk. As a result, there's more milk than consumers are willing to buy at the inflated price, so the government uses tax dollars to buy up the excess, turn it in cheese, and then ditch it later.

Hilarity ensues when not all states stay in lockstep with the federal price protections. California, for instance, allows milk to be sold at 2.5 cents per pound lower than the average minimum price in other states, a policy that pits California cheesemakers against California dairy farmers:

With feedstock costs skyrocketing due to the diversion of corn to make subsidized ethanol -- another brilliantly managed business -- California dairy farmers are on the ropes. Meanwhile, California cheese makers enjoy a competitive advantage because it is illegal for out-of-state cheese makers to buy cheaper California milk.

In desperation, instead of shipping the excess milk out of state, California dairy farms are shutting down and shipping their cows to states with higher minimum prices, allowing them to contribute to the glut there. This has caused California milk lobbyists to scream bloody murder, demanding that California bring its minimum prices in line with other states. Cheese lobbyists just smile, knowing that they have more legislators in their pockets and can afford to sit tight. That's just how central planning works.

Stand by for one of California's patented Cuban-style solutions to problems of this type: a move to tax outgoing cattle wealth.

8 comments:

Joseph W.3:09 PM
"What's that? He said...blessed are the Greek...?"
E Hines3:42 PM
Stand by for one of California's patented Cuban-style solutions to problems of this type: a move to tax outgoing cattle wealth.

Nah--just mandate that the cheese makers buy a dairy cow for every 100wt of cheese they sell and that every cheese buyer buy a quart of California milk for every pound of cheese.

See? Simple.

Eric Hines
Grim4:57 PM
...a move to tax outgoing cattle wealth.

Wasn't that the plot of an episode of Firefly? Mal and company help a wealthy noble smuggle his cattle offworld?
Anonymous6:51 PM
I don't recall if it was smuggle or just sell, but yes, serenity's hold ended up full of cattle. It was the episode where Inara tried to teach Mal to fence.

In a reasonable universe, at some point one would think that someone in CA's government would look at the situation and wonder if, perhaps, they might be doing something wrong in that they keep doing the same thing and not getting different results. But no.

LittleRed1
E Hines7:57 PM
..one would think that someone in CA's government would look at the situation and wonder if, perhaps, they might be doing something wrong in that they keep doing the same thing and not getting different results.

But they're happy with the results they keep on getting. They keep on getting through the day.

Eric Hines
bthun11:13 AM
And the Ca. voters return the same variant of Ca. Gubment widget to office.

//Karnak takes the sealed envelope, holds it to his forehead and proclaims, "A Federal bailout"...//
douglas4:33 AM
"And the Ca. voters return the same variant of Ca. Gubment widget to office."

Worse, we elected more of them. We now have a supermajority of Dems in the legislature, so they can tax at will- no minority to stop them short and force issues to proposition, where, surprisingly, many get voted down. When it comes, we'll deserve what we get out here, that's for sure.
DdR6:36 AM
Why all this separation? The owners of the cows should be able to sell milk, cheese and beef all from a single farm. But of course, that would make too much sense.