17.1.19

GOT A PROBLEM? GET A PROGRAM. THEN GET MORE PROBLEMS.

Last April, Milwaukee's Journal-Sentinel documented a shake-out of dairy farms in America's Dairyland.  "Wisconsin lost 500 dairy farms in 2017, and about 150 have quit milking cows so far this year, putting the total number of milk-cow herds at around 7,600 — down 20% from five years ago."  The cash flow problems down on the farm arose despite dairy subsidies, and they were present before protectionist farm policies in the United States and Canada became a side-show to Our President's Democrat industrial policy tariffs by executive order.
Small dairy farms have been disappearing from the rural landscape for decades, but the problem has been compounded by a sharp decline in farm-milk prices that's now in its third year and has spread across the country.

Farm cooperatives have urged members to think twice about adding more cows to their operations when the marketplace is awash in milk. Some have even offered incentives for members to quit farming altogether.
In markets as understood in introductory price theory, lower prices are inducements for producers to produce less.  Introduce price supports, and you have a way to keep up the production even if the lower prices are not encouraging consumption.  Consumers end up holding the cheese.
Data from the Department of Agriculture show that between 2008 and 2017, milk production in the U.S. climbed 13%.

Over those same years, however, consumption has sagged — with per capita milk consumption down 14%, USDA data show.

The surplus milk gets stored as cheese. If formed into one giant wheel, the current 1.39-billion-pound cheese surplus would be about as big as the U.S. Capitol Building.

Two years ago, the Obama administration effectively bailed out the industry, when it bought up $20 million worth — 11 million pounds — of cheese, which it then used for food assistance programs. But the stockpile has grown 16% since then.
Much of that cheese stockpile is the mild cheddar that's a feed-stock for American cheese.  That makes the consequences of the dairy subsidies the quintessence of a first-world problem, which is to say, a self-inflicted first world problem.
American diets are moving away from processed cheeses like Velveeta and Kraft, and many of the nation’s leading fast and casual restaurants are trying new things. Panera, like others, has replaced American cheese in their sandwiches with a four-cheese combo made up of fontina, cheddar, monteau and smoked gouda.
Make that a first-world problem with privileged foodies, who get to posture and preen for the benefit of their woke brethren.
In part, that’s because many Americans now think processed cheese is gross, but also because they’re au fait with quality cheese from around the world. It’s hard to turn back to an indestructible fluorescent orange mess once you’ve tried brie de meaux.

“We’re seeing increased sales of more exotic, specialty, European-style cheeses. Some of those are made in the US; a lot of them aren’t,” Andrew Novakovic, a professor of agricultural economics at Cornell University told NPR this week. Since imported cheese costs more than domestic, a few blocks of the good stuff might not leave much left in the old cheese budget for anything else.
The simpler explanation is that the opportunity set is now bigger for privileged foodies.  Even those who are obnoxious about their posturing and preening.

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