4 ms·

Walmart wasn't the first company to do this, many of the big grocers are in housing milk production, or so I heard from someone who works at Walmart HQ.

by dimino 7y ago

thaumasiotes 7y ago
To the best of my knowledge, milk in the US is subject to a couple of legal price floors. Here's Cato discussing it in 2007: https://www.cato.org/publications/commentary/madness-american-milk-prices https://www.cato.org/publications/commentary/madness-america... > The trouble started in 1930s with "marketing order" regulations. Those rules set minimum prices that dairy processors must pay to dairy farmers in 10 regions of the country. Today, about two–thirds of milk is produced under federal marketing orders, and most of the rest is produced under similar state schemes such as California's. > Marketing orders limit competition, because entrepreneurs are not allowed to supply milk at less than the government prices. > On top of marketing orders, Congress added a dairy price–support program in 1949. This program helps to keep prices high by guaranteeing that the government will purchase any amount of cheese, butter, and dry milk from processors at a set minimum price. > The Government Accountability Office compared U.S. dairy prices to world prices over the period 1998 to 2004. It found that U.S. prices for butter averaged twice the world price, cheese prices were about 50 percent higher, and dry milk prices were 24 percent or more higher. On the assumption that insourcing your milk production effectively exempts you from the price floor on outsourced milk, what's surprising is that there are grocers that don't do this.
- tipsysquid 7y ago
  The effect of the market ordering is more interesting than I anticipated. On one hand, this is encouraging decentralization of milk production. Which at first sounds neat. But that probably isnt more efficient; the market is distorted.

Walmart wasn't the first company to do this, many of the big grocers are in housing milk production, or so I heard from someone who works at Walmart HQ.

by dimino 7y ago

Walmart wasn't the first company to do this, many of the big grocers are in housing milk production, or so I heard from someone who works at Walmart HQ.

thaumasiotes 7y ago

To the best of my knowledge, milk in the US is subject to a couple of legal price floors. Here's Cato discussing it in 2007: https://www.cato.org/publications/commentary/madness-american-milk-prices https://www.cato.org/publications/commentary/madness-america... > The trouble started in 1930s with "marketing order" regulations. Those rules set minimum prices that dairy processors must pay to dairy farmers in 10 regions of the country. Today, about two–thirds of milk is produced under federal marketing orders, and most of the rest is produced under similar state schemes such as California's. > Marketing orders limit competition, because entrepreneurs are not allowed to supply milk at less than the government prices. > On top of marketing orders, Congress added a dairy price–support program in 1949. This program helps to keep prices high by guaranteeing that the government will purchase any amount of cheese, butter, and dry milk from processors at a set minimum price. > The Government Accountability Office compared U.S. dairy prices to world prices over the period 1998 to 2004. It found that U.S. prices for butter averaged twice the world price, cheese prices were about 50 percent higher, and dry milk prices were 24 percent or more higher. On the assumption that insourcing your milk production effectively exempts you from the price floor on outsourced milk, what's surprising is that there are grocers that don't do this.

tipsysquid 7y ago
The effect of the market ordering is more interesting than I anticipated. On one hand, this is encouraging decentralization of milk production. Which at first sounds neat. But that probably isnt more efficient; the market is distorted.