Posted on 09/22/2009 7:08:29 AM PDT by george76
But why overproduce if the need isn’t there? Supply and demand would tell you to limit production until it gets back in line with demand.
The need wasnt there but the price was there. If you were making a million dollars a month, would you care if someone like yourself didnt agree with it? Hell, no. So, what you get is what you have now. The Supply and Demand is regulating itself. But, the Megas are setting on hundreds of millions of dollars, and if they have to cycle through it for a year, what is ten million? Study your economics a bit more closely.
I asked a question because I am unfamiliar with the industry. No need for the snark.
I have no idea what a snark is, but I do know how economics work. What you have are the Megas protected by laws that they wrote, which translates into guaranteed government price supports. Milk price may be $8.50, but the price support payments guarantee them much more than that, and even more if they deliver an occasional load to certain higher priced areas such as Las Vegas, or Chino, California plants. If they do that, then they get the California price support instead of the local price support. They care little about supply and demand, it is cash on the barrel head now.
The bank that carried their paper failed, and that likely did not help them out once the auditors went through the books. The question then becomes who did what to whom? Is this a local issue, or is this an example of things to come for the industry? If you look at a map, you will see the dairies in the story are in the urban sprawl of the front range, and within a very few miles from them is an MSMA in excess of 15 million people. I dont think it is a demand problem as I study it more, it is just a cleansing of the gene pool. In the last 5 years, there were a couple dairies in the Muleshoe, TX area, a couple more in the OK panhandle, and a couple more in western Kansas that went under because of poor management, and no one heard anything about that other than locally. Yet, the Megas continue to build. As long as there is the opportunity for them to pocket a million dollars a month from those dairies, then that will be the guiding light, not supply or demand or anything else. Those who cant compete in that cut throat industry will simply get kicked unceremoniously to the curb. Their properties will be picked up cheap by another Mega, and the facility will be back in business with 3000 new cows in a few months, but managed profitably.
You had a couple of the Megas that didnt take root in your area, didnt you? They have since been bought up by others and are now back in business? The ones by Boise City are back up now, and another one has been built a mile or so south of them.
What amuses me is this talk about organic milk. Milk is milk. It is secreted by the milk glands of mammals. All that organic talk that applies to the formula is that the cows receive no medication, and are not fed any feed that has had chemicals applied to it. I would say that in the industry that is impossible. I dont know who is kidding who, but you haul hay, and you and I both know that that there is no way of telling if that hay has been sprayed or not. I’m not picking on you, I’m just saying we both know the industry, and absolute organic term applied to any commercial dairy is misleading, as you cannot have a thousand or two thousand or three thousand cows penned in such close proximity and not have to control disease and pests with chemicals. Grass run? Funny. I wonder how many square miles of grass it would take to run 3000 cows in our area? Can you imagine trying to get them all in to milk twice a day? Ok I’m amused,,,catch me on the flip.
I've been around confined livestock all my life and know that even pastured animals will pick up parasites from birds, wild animals and each other over time. Some they can live with albeit reduced production and others will kill them. Sometimes in a horrible fashion.
As far as the hay goes, it is pretty much an honor system no matter what kind of certificate is held. There is a dairy near here that has it's own hay fields and they are way out in BFE but they cannot positively say there has been no spray drift come in on it from fields nearby. So I would have to agree with you. Want totally organic, you better have a large dome...
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