As we encourage people to “Dump Dairy” this month, dairy producers are doing some dumping of their own. Demand for milk has dropped around the globe, creating a “world milk glut” with supply far exceeding demand and leaving the industry scratching its head over what to do.
You see, the dairy industry isn’t weaned from the government teat. Since 1949, the federal government has been supporting the dairy industry with various price-fixing programs. It has a strong hand in setting the price of milk, which doesn’t necessarily correspond to consumer demand (or lack thereof). There are a whole host of subsidy programs — the Federal Milk Marketing Order, the Milk Income Loss Contract Program, and the newly revived Dairy Export Incentive Program, just to name a few, that make sure the milk industry gets paid for producing a lot of affordable milk regardless of whether or not someone wants to drink it. Some programs benefit the producers, others the processors and middlemen – none of them benefit the cows. The result we are seeing today is more milk than anyone wants and producers unable to pay their bills.
Earlier this year, some farmers dumped milk in their version of the Boston Tea Party to bring the government’s attention to what some dairymen characterized as a “corrupt” government pricing scheme. But a national “milk strike” was nixed as poor strategy given what they ultimately want is to profit from their milk. Their latest fix for the over-flowing supply of milk is culling their herds by dumping their cows at slaughterhouses. The National Milk Producers Federation is implementing what they euphemistically call a “retirement” program for 100,000 cows. As part of this scheme, dairies are raiding the rainy-day fund they contributed to so they can pay themselves to go out of business. The Federation’s program alone amounts to 388 dairies no longer in operation. Of course, if you are a dairy cow, you don’t get a pension plan as a reward for your years of service — just a trip to the slaughterhouse.
Meanwhile, the government continues to buy up surplus dairy products and divert them to the school lunch program or other federal assistance programs, where many of the recipients of this surplus dairy are physically intolerant of it, hence one of our reasons to call for non-dairy alternatives in the Child Nutrition Act.
Some dairy producers are even asking Congress to set a higher minimum price for milk. However you look at it, what we are seeing is yet another buyout of a failing industry that’s already been overly subsidized to the point of creating a false market.