The milk subsidy actually increases milk prices. It’s the government picking dairy farms as high-profit winners rather than letting the market sort it out.
The taxpayers should not be subsidizing any business be it electric cars, steel or milk. Anything the government does is paid for by the taxpayer.
Today, dairy production is much more concentrated and there are scores of substitutes for milk products. I'd compromise and make it a 50 cow limit per herd.
Yeah, I know the optimal solution, in the long run, would be to let the market sort it out. But the fact of the matter is that cattle herds, be it dairy or beef, simply cannot respond to market over/under supply issues as quickly as someone raising hogs or turkeys.
Unless the government were to get out of the way entirely (a pipe dream), some sort of stabilizing mechanism is necessary, though certainly not to the extent that the dairy lobby has in place now. The National Cattleman's Association, which represents mostly beef ranchers, has much better policies in place which seek to reduce, not increase, the government role in the sector.
Dairy farmers around here would be surprised to hear themselves as “high profit winners.” At the same time milk prices went up, feed prices doubled. Other inputs have also gone up in price (IE anything and everything hauled in or out by truck because of fuel prices; sawdust for bedding less available since the Recession closed lots of furniture and cabinet factories ...)
DH and I milked cows until 2003. We figure the margins now are just as tight ... only the numbers have changed.
When we sold out we were in the Milk Income Loss program for a year or so. We were just circling the drain. It cost us about a dollar a gallon to produce but we were being paid 75 cents per gallon.
If it looked like we could make a living again milking cows I think we’d give it a shot. But it doesn’t look that good.