the visible hand

it is the theory which decides what can be observed – einstein

Milk glut?

Posted by ecoshift on January 1, 2009

As Recession Deepens, So Does Surplus of Milk – NYTimes.com
By ANDREW MARTIN
Published: January 1, 2009

FOWLER, Calif. — The long economic boom, fueled by easy credit that allowed people to spend money they did not have, led to a huge oversupply of cars, houses and shopping malls, as recent months have made clear. Now, add one more item to the list: an oversupply of cows.

And it turns out that shutting down the milk supply is not as easy as closing an automobile assembly line.

As a breakneck expansion in the global dairy industry turns to bust, Roger Van Groningen must deal with the consequences. In a warehouse that his company runs here, 8 to 20 trucks pull up every day to unload milk powder. Bags of the stuff — surplus that nobody will buy, at least not at a price the dairy industry regards as acceptable — are unloaded and stacked into towering rows that nearly fill the warehouse.

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4 Responses to “Milk glut?”

  1. Heraldo said

    So now the taxpayers are being cowed into buying milk power that’s being over-produced, and the dairies have no reason to slow production because taxpayers will buy it one way or another. Crazy.

  2. ecoshift said

    Crazy indeed. Seems our willingness to violate market logic is standing naked as the economic tide recedes.

    A good time to realign our priorities. On the one hand I’d hate to see the local dairies go broke or be subdivided for residential use. On the other hand what’s the logic behind providing price supports and what should taxpayers expect in return?

  3. Mary A said

    Since the taxpayers are going to have to buy it, why not channel it to all the food banks to give away to the unemployed?

  4. ecoshift said

    Perhaps a return to the commodities program from the early 70’s would be useful in the next year or so…

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