5 ms·

If anyone can out-Walmart Walmart, it's Aldi. When Aldi came to Dallas a few years ago (I'd like to say 2010-2011ish), they started a price war over milk that

by amyjess 11y ago

If anyone can out-Walmart Walmart, it's Aldi. When Aldi came to Dallas a few years ago (I'd like to say 2010-2011ish), they started a price war over milk that resulted in milk prices in Dallas plummeting to 1960 levels. Edit: Source: http://www.wfaa.com/story/money/consumer/2014/08/10/13621020/ http://www.wfaa.com/story/money/consumer/2014/08/10/13621020...

untog 11y ago
I do wonder what the effect of this is on dairy farmers.
- Kalium 11y ago
  If recent events in the UK are any guide, they get really unhappy over low prices. Your basic economic forces take it from there. Dairy farmers are like any other business in that many can stand to be more efficient.
  - chestnut-tree 11y ago
    "If recent events in the UK are any guide, they get really unhappy over low prices." Dairy farmers in the UK were complaining that some supermarkets were paying them less for a litre of milk than what it cost them to produce the milk. After protests from farmers, those supermarkets - which included Aldi, Lidl, Asda (owned by Walmart), and Morrisons - agreed to pay more for the milk price. The cost of milk is pretty cheap in the UK. Four pints (2.27 litres) of fresh (not UHT) semi-skimmed milk is usually 90p to £1 in most UK supermarkets (that'a approx €1.37 or $1.50) "Dairy farmers are like any other business in that many can stand to be more efficient." I don't know if farming practices are inefficient in the UK, but it's worth asking: what does efficiency mean when it comes to farming and animal welfare? I don't want to see dairy farmers go out of business or for milk to be imported. And I don't want to see more "zero grazing" farms where intensive indoor grazing is the norm and cows have little or no outdoor access. Intensive farming methods like this are already used in the UK and continental Europe and look set to grow. Perhaps it's really for us as consumers to ask: what price are we prepared to pay for milk?
    - Kalium 11y ago
      I, personally, am completely willing to see dairy farmers go out of business because they can't compete with imports.
      - untog 11y ago
        That can be a short-sighted view, geopolitically. Look at the dependency many countries have on Russia for gas these days.
        Kalium 11y ago
        True! However, for things that are not economic necessities I view it as less of a problem.
    - jarfil 11y ago
      When "outdoor grazing" means dedicating land for animal use instead of planting crops that could feed several hundred people, just so that a couple of them can get to drink milk... I'd rather see the "zero grazing" variant. Or get rid of the stupid cows already.
- ctdonath 11y ago
  Government subsides are a major factor in dairy prices.
- mullen 11y ago
  They sell more milk at a lower price, so I believe it works out for them.
  - 6t6t6 11y ago
    It is never as easy as that. Law of supply and demand is not a linear function and externalities count too. Also, most of the markets are somehow captive. I doubt that people will drink much more milk because it is cheaper. What happens is that supermarkets don't care if they loose money with one product because what counts is the average of the basket. So what happens is that milk producers will pay the price of a marketing operation.

by amyjess 11y ago

untog 11y ago

I do wonder what the effect of this is on dairy farmers.

Kalium 11y ago
If recent events in the UK are any guide, they get really unhappy over low prices. Your basic economic forces take it from there. Dairy farmers are like any other business in that many can stand to be more efficient.
- chestnut-tree 11y ago
  "If recent events in the UK are any guide, they get really unhappy over low prices." Dairy farmers in the UK were complaining that some supermarkets were paying them less for a litre of milk than what it cost them to produce the milk. After protests from farmers, those supermarkets - which included Aldi, Lidl, Asda (owned by Walmart), and Morrisons - agreed to pay more for the milk price. The cost of milk is pretty cheap in the UK. Four pints (2.27 litres) of fresh (not UHT) semi-skimmed milk is usually 90p to £1 in most UK supermarkets (that'a approx €1.37 or $1.50) "Dairy farmers are like any other business in that many can stand to be more efficient." I don't know if farming practices are inefficient in the UK, but it's worth asking: what does efficiency mean when it comes to farming and animal welfare? I don't want to see dairy farmers go out of business or for milk to be imported. And I don't want to see more "zero grazing" farms where intensive indoor grazing is the norm and cows have little or no outdoor access. Intensive farming methods like this are already used in the UK and continental Europe and look set to grow. Perhaps it's really for us as consumers to ask: what price are we prepared to pay for milk?
  - Kalium 11y ago
    I, personally, am completely willing to see dairy farmers go out of business because they can't compete with imports.
    - untog 11y ago
      That can be a short-sighted view, geopolitically. Look at the dependency many countries have on Russia for gas these days.
      - Kalium 11y ago
        True! However, for things that are not economic necessities I view it as less of a problem.
  - jarfil 11y ago
    When "outdoor grazing" means dedicating land for animal use instead of planting crops that could feed several hundred people, just so that a couple of them can get to drink milk... I'd rather see the "zero grazing" variant. Or get rid of the stupid cows already.
ctdonath 11y ago
Government subsides are a major factor in dairy prices.
mullen 11y ago
They sell more milk at a lower price, so I believe it works out for them.
- 6t6t6 11y ago
  It is never as easy as that. Law of supply and demand is not a linear function and externalities count too. Also, most of the markets are somehow captive. I doubt that people will drink much more milk because it is cheaper. What happens is that supermarkets don't care if they loose money with one product because what counts is the average of the basket. So what happens is that milk producers will pay the price of a marketing operation.