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Low milk prices are bad, it seems


Tags Interventionism


Looks like the critters in Washington have done it again. Whenever someone finds a "loophole" (or, as it should be called, an island of liberty), they want to shut it down.

This time, it has to do with the price of milk in Arizona and California. Hettinga's dairy farm was offering 2 gallons of milk for $3.99 and of course the rest of the industry, seeing that Hettinga was competing "unfairly," called on Daddy State to save them. Thus,

On Tuesday, President George W. Bush quietly signed into law S. 2120, the so-called Milk Regulatory Equity Act of 2005, a carefully crafted piece of legislation which was aimed squarely at preventing Hettinga's dairy farm from offering milk at lower prices than Dean Foods and other large milk distributors such as the Dairy Farmers of America.
The bill, passed in both the House and Senate with almost no debate, amends the Agricultural Adjustment Act, part of the Agricultural Marketing Agreement Act of 1937, and will require Hettinga to participate in federal milk marketing order requirements, effective May 1.
The federal milk marketing program requires most milk producers and handlers to set minimum prices on their products and to pool their revenues. It also tries to balance the supply and demand of milk and milk products, which can vary widely from day to day.
Whether that's actually true, or the milk marketing program is even needed, is debatable, as Hettinga's success shows. The new law would, in effect, require Hettinga to pay his competitors to stay in business.

What an amazing show of economic ignorance. If you can stand it, there's more here.

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