California dairy prices have long been subject to a complex and arcane regulatory system, operated independently from U.S. Department of Agriculture price controls on dairy products nationwide. For most of the more than 75 years it has been in place, California milk producers were paid more for their products than other U.S. dairies. However in the past couple of years, a combination of high feed prices and falling demand have put hundreds of California dairy farms out of business, diminishing competition and ultimately hurting consumers. Viewed from a macroeconomic perspective, the heartbreaking scenario offers a perfect demonstration that price controls—even those that are institutionalized over generations—simply don’t work.
By silveristhenew | Published March 13, 2013
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