To subsidize or not to subsidize: Dairy

WOW! My son in law was a mechanic (and a very good one, too) and he quit to be an over the road truck driver because he was not making enough to keep the family and farm running. The garage may charge those rates, but the mechanics working there usually get paid by the job - and it usually works out to around $15 per hour. Assuming they are occupied the entire 40 hours per week. He is making a lot more trucking.

Mary

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Mary,

The $80/hour is what the mechanic is making and their busy all the time.

My son has been working in Alaska at a coal mine and making in excess of $100k, he's been recruited by a trucking company and is going to be based out of ID. He said he'll by the time you figure the extra cost of living in Alaska hell be about the same income.

Bobg

Gee I sure wish the truth would be posted as to what the Garage charges vs what the HEAD Auto Mechanic makes.
As a Rule of Thumb, the HEAD AutoMechanic makes ONE HALF of what is Posted for the Hour Rate the station charges.
And in a great majority of shops the Mechanic Works off the Flat Rate Book. Which ALL shops have as their bases for what to charge for a hour rate.
A BOOK that Says What and How much it takes to Make ANY repairs, or replace ANY component. How LONG it takes and what the Rate then to charge.
Now the Mechanic that can "Beat That Flat Rate Book" are the ones that make GOOD MONEY, those that are the same as THE BOOK, are pretty much the ones that are Just Making a living.

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I agree that changes need to be made, especially aligning supply with demand and improving marketing. Good policies wisely implemented over time have the potential to move the industry in the direction of a freer market without capsizing it.

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agreed, but unfortunately, the gov't rarely comes up with a good policy and even when it does, the good policy is almost never wisely implemented. The incentives in gov't are all wrong for capitalistic markets.

Brenda, the Farm Bill is the USDA budget.

And 80% of the USDA budget is SNAP.

No it got passed.

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Roger

http://www.politico.com/story/2013/0...ion-85641.html

9 month extension. Seems the Dairy Industry is wanting some major changes that push towards a free market, but they are being blocked by Republicans. That seems odd.

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Caliann

"First, Show me in the Bible where it says you can save someone's soul by annoying the hell out of them." -- Chuck

I think it was JFK that said Farmers are the only one that buy retail, sell wholesale and pay the freight both ways.

Without price supports, the price of milk would have big swings. When there was too much supply, prices would drop. Small dairies would not survive. Large operations that get their money from other sources, can weather a few years of low prices. As soon as the price rebounds, farmers gravitate to the dairy business, again, and supply increases and prices drop. On each downward cycle, a few more small and medium dairies close.

The subsity is more to stabilize the price for the consumer than to reward the farmer.

Free market on milk would result in wide swings in the price of milk from the farm. Republicans, business owners, like an artifically low, stable price for their farm milk. Easier to make long term plans on your milk processing factory when you know what the price will be.

Here is what the voices in my head are saying..
Goberment causes milk to be $7 a gallon but they are working harder and harder to outlaw home production of goods for both the producer and consumers. Cant afford to buy and its illegal to produce where does that leave us?
I am glad is shedding light to people on the topic, folks first hear of the cost for me to sell some milk for their "pets" and think Im robbing them but they dont realize that is the cost of production I just get customers because I charge a $1 less a gallon than most people around here, if it was a business I would go under fast.

I was eating a Hershey bar the other day and read the wrapper, MADE IN MEXICO, so I'm doubtful that US milk prices effect them at all.

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The "Goberment" in Michigan is working harder to open markets for the small producer/cottage industry. Recently changed the law to allow a bunch of products to be sold at Farmer's Markets that were made in un-inspected kitchens. I don't know of anywhere that you can't produce milk.

Sounds like you've had some experiences with consumer's expectation for low cost food. Imagine if you had to do it for a real wage?

I don't believe government always is wrong and business always is right, anymore than I believe that business always is wrong and government always is right. Both are made up of humans, and thus are subject to corruption and other human frailties.

Governmental policy tends to be a mishmash because various (sometimes competing) interests inevitably take places at the table, which makes things messy ... but ponder the alternatives. As Churchill said, democracy is the worst form of government, except for all the others ...

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Creating a good thriving dairy with good genetics can take 5-10 years.

Probably the same to develop good auto mechanic skills.

Fella with a lot of money invested in a tool set can find different jobs to tide him over. See a lot of old auto stores made over into dentist, insurance, even deli offices and businesses. Both the employee and the business itself can go on.

Dairy farmer hits a rough patch, and has to sell out his $2000 a head cows, he's done. Never gonna invest in rebuilding, he's too old. The barn will sit empty, the contents will be sold for scrap. The small dairy is gone.

Difference between the 2 business models.

The trouble with dairy, when it goes bad, the only way out is to produce more milk. So, bad times create even worse times. And so on.

This creates big waves of prices in milk and cheese.

It's just a terrible business model. Horrible.

If we could move our govt to a no-subsidy level (ha!) dairy is one of the few that would still benefit from some form of oversight.

I've never sold a gallon of milk in my life so have no axe to grind. Just if you look into how dairy business is set up, it does not fit well in the short-natured laws of supply and demand. Without supports, we will only have super mega dairies that are able to control their own supplies. Little guys will be goners. Quickly.

That's fine, but be sure you understand what it is you are asking for. Very very quickly, all dairies would have ADM, Cargill, or Kraft on them, no individual dairies.

Paul

I see stories on this milk deal in the news, and it appears they haven't a clue what this all is about, the news is feeding you a bunch of hooey.

The milk portion, a very very tiny part of the farm bill, had a parity program in it back many decades ago. Farmers were supported to a parity price, a level that is the equal to other businesses, adjusted to inflation, etc.

If we revert to that parity formula, a gallon of milk should be worth $7 or more a gallon....

Do we all understand this?

A car, or a house, is many times the cost of what it was back in the 1940s.

Was an auto mechanic getting a buck an hour in the 1940s? And today is getting 15 to 100 bucks an hour?

And what does milk cost you? Less than half of what it _should_ cost us all.

Perhaps we should wonder if those dairy supports have helped us keep stable prices, keep individual dairy farms, and keep food prices low?

If the parity price for milk _should_ be almost double what it is today?

Paul

I've been ruminating on how I really feel about subsidies since the thread started.

My verdict is I think *all* subsidies should go so that Americans know what things *actually* cost.

The main obstacle to selling "real food", (besides the government falling all over it's own sword protecting us from ourselves of course...) is that "local" and "organic" and "pastured" is more expensive than the cheap and conventional for the consumer....
Really though, it's that the small producers of good stuff don't have subsidy checks to make it cheaper than it is.

Lets see subsidies go--- we can't afford them anyway. If we are really concerned about "affordable food" the government can funnel less funds into supporting food pantries and food stamps and do more good.

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Once again, in the land of the free, we can't figure out how to have a free market. How on earth did our species survive all those centuries without subsidized milk?

For each of the thousands of government programs, there are countless people who tell us we cannot live without it. Add them all up, and we are facing serious times. Yet not one program can be cut, and all continue to grow. An endless list of excuses is made for out-of-control spending.

Bottom line is that pretty soon we're going to have to figure out how to do things without forcing the people to pay for it through taxes and inflation resulting from money printing.

If the business model doesn't work for farmers, they shouldn't exist, and we either don't drink milk, or people can get their own cow.

Subsidies will end - before the crash, or after.

I don't understand your comment here, and rather than speculate, what are you saying?

Paul

I live in a state (MS) where dairies were once very common. However, there are only a fraction of those dairies still in business. While no farmer is making a killing off subsidies, its like getting someone hooked on drugs then cutting them off. I'm not sure what the solution is, but we have a situation where 1) Americans want cheap food (often with cheap nutrition), 2) Todays younger generation (and I include myself in that category, 39) dont care to be "tied" down to that type of job. The business of agriculture has become very complicated since the gov't got involved whether by intent or not.

So wait a second, your saying a completely self regulating industry is doing good? But how can they without government regulations? I guess its because its all just big business, not like there are small auto repair shops on every corner or anything.

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