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Milk Price Crisis: Wrongdoing Or Bad Economy?
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For the last year, dairy farmers have been getting record low milk payments and it has not been passed on to consumers at the grocery store. Now a Department of Justice probe is underway to find out why. "Some farms have been losing $30,000 a month because of the dairy crisis and the drop in prices, while you're only seeing a 15 percent drop in prices at the store. Something doesn't figure right there," said Jefferson County Agriculture Coordinator Jay Matteson. When farmers sell their milk, they are on average getting just over $1 per gallon. At the store, prices are more than $3 per gallon. Many are wondering if milk processors are to blame for anti-competitive practices. "I think we need to know and I thing the Department of Justice will be able to tell us - is there any funny business going on at that very fundamental pricing discovery level. We need to know it," said New York State Agriculture Commissioner Patrick Hooker. But some dairy experts say they aren't so sure dairy processors are the ones at fault. "I don't really think the current situation is really the result of any serious anti-competitive behavior and I don't think it's the result of a particular policy that we have in place. I really think the primary cause is the fact that the economy has entirely tanked," said Andrew Novakovic, a professor of agriculture economics at Cornell University. Since dairy prices paid to farmers are adjusted by the federal government, some say this won't fix the current dairy crisis. Dairy experts don't expect farmers to begin breaking even until at least the middle of 2010. Most Popular |
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