Dairy gets squeezed by the feds

The Seattle Times ^ | 1 June, 2005 | Danny Westneat

[Radigan]

In its 85 years of existence, Smith Brothers Dairy in Kent has survived all manner of misfortune and mistakes.

There was the Depression, when milk sales plummeted. There were cow-killing floods. There were modern times, when it appeared the old-fashioned idea of fresh milk delivered to the doorstep had died.

And there was the crackdown when society realized cow manure could be as toxic to fish as anything produced at a nuclear plant.

"None of that compares to this," says Alexis Smith Koester, 60, dairy president and granddaughter of the founder, Ben Smith. "This is the biggest threat we've ever faced."

She's talking about the federal government.

The U.S. Department of Agriculture has proposed new rules that could force Smith Brothers to either give up half its business or close up shop entirely, Koester says.

What are the feds trying to stop? They're trying to keep Smith Brothers Dairy from selling its milk for less.

And we call this a capitalist country.

The dairy, which is small enough that the president answered the phone when I called, is being punished for doing too much too well.

For 75 years, milk has been heavily regulated by price and marketing controls.

People who know more about it than I do say the system works well. It protects those who own only one part of the milk business — say, a farmer with cows but no milk-processing plant — from being gouged by big agribusinesses.

But Smith Brothers has always been exempt from these regulations because it is so independent. It does it all. It is one of only 11 dairies left in the Northwest that raise and milk the cows as well as pasteurize and bottle the milk.

Its business model is so antiquated that most dairies like it long since went under.

Smith Brothers survived by discovering that what was old is new again. Home delivery of milk is hot. Especially if people know who owns the cows so there's a guarantee no growth hormones were used.

Remarkably, Smith Brothers now delivers milk to 40,000 homes in and around Seattle, the most in its history. And it is so efficient it does so at the same or lower prices you get in many stores.

Yet the feds, backed by the biggest dairy processors in the West, want to force Smith Brothers and other do-it-yourself dairies to sell through the government-regulated system. They say this will help the small farmers who already sell milk to big processors.

But Smith Brothers, no milk monopoly with just 1 percent of the market, would have to pay subsidies to its competitors that exceed the dairy's yearly profit. Or it would have to break up its business, and no longer provide its unique cow-to-carton-to-doorstep service.

So what we have is the government, prodded by large corporations, saying it is helping small family farms by destroying one of our most successful small family farms.

Come to think of it, I guess that is American-style capitalism after all.

Danny Westneat's column appears Wednesday and Friday. Reach him at 206-464-2086 or dwestneat@seattletimes.com.

[eastforker]

Please read on down the line that it is not a social problem but one of security to this nation.

[Feiny]

http://www.heritage.org/Research/Agriculture/BG1542.cfm

[Feiny]

http://www.heritage.org/Research/Budget/bg1763.cfm

[eastforker]

Yes except for one point, this is a very old company, not a new upshoot corporation, they have been doing this before gov. intervention.

[Feiny]

Maybe I am missing your point.It is the new regulations that govt. in trying to enforce upon them that would put them out of business. They would be forced to give subsidies to bigger dairy farms.

The result of subsidizing the rich, more landed farmers is that they can reduce the prices of their goods, making it much harder for small farmers to compete. Rather than being the small family farmers’ savior, subsidies work against them.

[eastforker]

This family owned business has been around for 75 plus years. The gubmint is saying that this business has to subsidise smaller farms because they own their own cows and can compete cheaper. I would agree if this was a new company that moved in just to close the small farmer but that is not the case. We must never on the other hand ever let our small farmers go out of business, they are the ones that feed us daily because if we only support the big coops, who knbows who might own them in the future.

[eastforker]

Let me add something, has anyone here been following the farm crisis in Zimbabwe, no more food is being produced, mass starvation by the hands of that government, rich farmlands idle and the population starves. We must alway make sure our small farmers have the ability to produce food.

[freepatriot32]

Libertarian ping.To be added or removed from my ping list freepmail me or post a message here

Not to worry all people have to do is vote straight republican ticket in the next election and put republicans in the white house senate and congress and as soon as the republicans area majority all thise intrusive bloated federal goverment garbage will stop over night.especailly if you elect george bush to the presidency it will stop because george bush is a reaganite conservative you know /HEAVY SARCASM

[eastforker]

I agree with you somewhat, however, some things must be preserved , mainly, our food supply.

[eastforker]

I chalenge any of your pings to refute my claims. We must preserve our food supply.

[Feiny]

Zimbabwe is a different matter entirely. The white farmers were either killed or forced to leave.

[freepatriot32]

We must preserve our food supply.

Shutting down this dairy will in no way shape or form protect the american food supply at all

[eastforker]

Let me make one more point, do any of you know what our national food reserve consist of, would you believe just five days! Thats right, if food could not be delivered, grocery store shelves would be bare in 5 days. Anyone here willing to forgo that?

[Feiny]

This family owned business has been around for 75 plus years.

It doesn't matter if they were only around 5 years. This policy is wrong. No one should have to pay for someone else to be stay business.

The gubmint is saying that this business has to subsidise smaller farms because they own their own cows and can compete cheaper.

I really think you are reading this article incorrectly. The subidies are going to larger dairies. This guy has 1% of the business. What happened to a free market economy?

We must never on the other hand ever let our small farmers go out of business, they are the ones that feed us daily because if we only support the big coops, who knbows who might own them in the future.

Did you read the links I sent you earlier? The subsidies aremostly going to BIG business. This is tax money going to prop up big businesses & that hurts the small guys.

[eastforker]

So you want to shut down this family business?

[eastforker]

Did you read my earlier statement, the big guys should not be receiving it, it was meant for the small guy.

[dcwusmc]

And what subsidies might those be? I see nothing to indicate this dairy gets one cent in subsidy monies, only that as a producer/bottler they are exempt from the usual USDA barbra striesand. Where do YOU get this info from? Or is it something you just pulled out of your butt?

[Feiny]

"We must alway make sure our small farmers have the ability to produce food."

You can do this as an individual by purchasing food at farmers markets. You don't need a federal program to take your money & give it to a large (or small) food producer to keep the stores full and the prices low. You either believe in capitalism & the free market or you don't.

[Feiny]

But, that is not the case. The big guys are getting them. Look at the numbers.

[eastforker]

read this:Yet the feds, backed by the biggest dairy processors in the West, want to force Smith Brothers and other do-it-yourself dairies to sell through the government-regulated system. They say this will help the small farmers who already sell milk to big processors.

But Smith Brothers, no milk monopoly with just 1 percent of the market, would have to pay subsidies to its competitors that exceed the dairy's yearly profit. Or it would have to break up its business, and no longer provide its unique cow-to-carton-to-doorstep service.