I remember reading somewhere that dairies have bascially monopoly powers. They rigidly control the price of milk in some states (like New York and here in California), fluid milk products cannot be used in promotions or double coupons, and basically there are all sorts of restrictions on where milk can be sold, if it can be transported out of state by the dairies etc. - any insight?
Also, what is the deal with “Generic” milk being priced so much less than the regular brands (like Knudsen, Jerseymaid, Hood etc.)
There has been a huge dairy monopoly going on for ages, supported by the government, bad for the farmers, but good for the milk distributors. You cannot really think that cheese costs nearly the price of a gold ounce naturally, can you?
Look around for other things because this is a wonderful site for governmental dirt and is factual, not just speculation and it’s ‘pig books’ are truthful.
There has been consolidation in dairy distributors just like any other business of late. Suiza just bought out a couple of the northeast names in the last couple of years. The price the distributors/bottlers pay the farmers is based on a formula developed by the government which includes variables for a variety of dairy related products. That formula has in the past been manipulated by the companies involved, mostly through the cheese market. Last year they developed a new formula hoping to be more in line with the actual demand. Its’ effectiveness is somewhat questionable. This formula price is the major factor in the price you see on the shelves. Different areas of the country are under different ‘milk orders’ and this has various shifts on thed formula price for that area. As for whether these companies have a monopoly, it could be argued that since they all pay the same price (fixed by the government) for their main ingredient raw milk.
As for milk crossing order borders I don’t think that is a huge problem. Before the NY order and the New England orders were combined we produced milk in the NY order and sent to a distributor in the New England order.
After getting many complaints by consumers in NY state about price gouging they passed a law here that the price of a gallon (in the store) couldn’t exceed about twice (IIRC) the price the paid to the farmer. I don’t know if other states have similar laws.