The dairy industry is in a period of dramatic upheaval. American per capita consumption of milk fell from 247 pounds per capita in 1975 to 149 in 2017. At the same time, Production increased 10% over the past decade. This creates an obvious oversupply of dairy, and the longest lasting way to store dairy is processed cheese. To that end, there are currently 1.4 billion pounds of surplus cheese in storage. This is the largest surplus in history. This oversupply of dairy has created an unsustainable business model for farmers, as whole milk currently has an average price of $15.12 per 100 pounds, below the break even point for farmers. (1)
Farmers, especially organic ones, have been hit by two simultaneous upheavals. Because organic dairy products fetched a premium, large farms entered the market, and a race to the price bottom ensued. The price of organic milk dropped by 30% over the past two years due to oversupply. A similar story of overproduction can be told for conventional dairy products as well. At the same time. farmers say that the backstops for their businesses, government subsidies and insurance programs, are ineffective. (2)
Keep in mind that industries reliant on government handouts and insurance bailouts are likely rent seeking, and anti-competitive. Furthermore, the dairy industry created their troubles through overproduction. It is hard to blame people for trying to earn a living, and all people deserve that opportunity. There does not seem to be a way out of this mess without a lot of people getting hurt.
As the reckoning comes for dairy farmers, an escaped cow in Anchorage, AK has eluded capture for six months. Surviving in the forests outside town, even in winter. Her former owner Frank Koloski remarked, “I know deep down this cow doesn’t want to be caught.” When reached for comment, all sentient being shared this sentiment. (3)