informationliberation
The news you're not supposed to know...




An Introduction to Austrian Economics: Understand Economics, Understand Everything
The Century of the Self: The Untold History of Controlling the Masses Through the Manipulation of Unconscious Desires
The Disappearing Male: From Virility to Sterility

The Obama Deception: The Mask Comes Off
Operation Gladio: The Hidden History of U.S. Sponsored False Flag Terrorism in EuropeThe New American Century: The Untold History of The Project for the New American Century
(more)
Article posted Dec 19 2012, 12:40 PM Category: Economy Source: Gregory Cummings Print

The Udder Futility of Centrally Planned Milk Production

by Gregory Cummings

Dairy products in Canada cost roughly two to three times more than in the U.S. This has the Canadian Restaurant and Foodservices Association (CRFA) feeling cheesed.

In an open letter to the Canadian Dairy Commission (CDC), the CRFA decried the current state of affairs:
Canada's restaurant industry purchases $2.5 billion a year in Canadian dairy products. As one of your largest customers, we want to do more to promote and grow the market for Canada's high-quality dairy products. Unjustifiably high prices, however, are having the opposite effect. This should be of concern to all of us along the supply chain, from farm to fork.
When applied to the Canadian dairy industry, the term "market" is a substantial misnomer. In fact, the "unjustifiably high prices" for dairy products in Canada are a direct consequence of supply management, or the centrally planned production of milk.

Our national supply management apparat is the Canadian Dairy Commission, whose commissars purport to calculate a national milk production target, or quota. This national quota is then divvied up amongst the provinces who then allocate it to farmers. As per the CDC mandate, it is designed to "stabilize revenues and avoid costly surpluses." In order to achieve predictable profits for dairy farmers, the quota is designed to achieve a target price for milk, which is calculated as a function of farmers' costs.

Because of this, there is less economic incentive for dairy farmers (especially the least efficient among them) to reduce their costs. This helps keep marginal operators in business. It also contributes to ever-increasing dairy prices that continue to outpace CPI growth. With higher prices, less dairy is demanded. In fact, milk production is actually lower than it was four decades ago.

Further conflagrating matters is the fact that protective tariffs (for example, a 299% mark-up on imported butter) restrict competition from foreign exporters.

Of course, this socialist methodology is deeply flawed. It has resulted in the current mess.

The answer to prices as a function of costs is prices as a function of consumer preferences. By comparison, in an unhampered market economy, costs have no influence on prices. Indeed, the law of price, as stated by Murray Rothbard, reveals that:
Individuals, on their value scales, evaluate a given stock of goods according to their utilities, setting the prices of consumers' goods; the stock is produced according to previous decisions by producers, who had weighed on their value scales the expected monetary revenue from consumers against the subjective costs (themselves simply utilities foregone) of engaging in the production. In the former case, the utility valuations are generally (though by no means always) the ones made by consumers; in the latter case, they are made by producers. But it is clear that the determinants of price are only the subjective utilities of individuals in valuing different conditions and alternatives. There are no "objective" or "real" costs that determine, or are co-ordinate in determining, price.
Alternatively, William Stanley Jevons explains:
Labour once spent has no influence on the future value of any article: it is gone and lost forever. In commerce bygones are forever bygones and we are always starting clear at each moment, judging the values of things with a view to future utility. Industry is essentially prospective, not retrospective.
The free market is resilient. Incredibly, supply management in Canada has led to a flourishing underground market in cross-border cheese. That's right, cheese-smuggling.
"With U.S. cheese being as little as a third the price it is in Canada, drivers are making $1,000 to $2,000 a trip," the story says.

Adding to the absurdity, the police department's internal affairs division is also investigating, because officers were allegedly involved.

Mario Sebastiano, the owner of Super Mario's pizza in Port Colborne, told the CBC he was approached by a Fort Erie man.

"He was gonna sell me a case for 150 bucks -- normally its $240," he said.
When it comes to socialism versus capitalism, it should be obvious on which side your bread is buttered.
_
Gregory Cummings is a Pharmacist and Certified Diabetes Educator. He has owned and operated his own retail pharmacy business since 2009. An alumnus of Dalhousie University in Halifax, Nova Scotia, Cummings received his bachelorís degree in pharmacy with distinction in 2008. He lives in Sault Ste. Marie, Ontario with his fiancee and pet dog.





Latest Economy
- American Ranking Plummets in Global Index of 'Personal Freedoms'
- Your "Children Will Be Fined" If You Fail To Sign Up For Obamacare: People Are Going To Be In for A Shock
- The End of QE Is Not the End of Bad Policy
- "They Just Want The Money!" - The IRS Can Now Seize Accounts On Suspicion Alone
- Hillary: 'Don't Let Anybody Tell You' That 'Businesses Create Jobs'
- Does Ebola Justify the State?
- Low Inflation? The Price Of Ground Beef Has Risen 17 Percent Over The Past Year
- EFF, Internet Archive, and reddit Oppose New York's BitLicense Proposal









Comments Add Comment Page 1 of 1
Anonymous

Posted: Dec 20 2012, 7:34 AM

Link
24157 The government control over production is a characteristic of totalitarian communist governments.


Add Comment
Name
Comment

* No HTML


Verification *
Please Enter the Verification Code Seen Below
 


PLEASE NOTE
Please see our About Page, our Disclaimer, and our Comments Policy.


FAIR USE NOTICE
This site contains copyrighted material the use of which in some cases has not been specifically authorized by the copyright owner. Such material is made available for the purposes of news reporting, education, research, comment, and criticism, which constitutes a 'fair use' of such copyrighted material in accordance with Title 17 U.S.C. Section 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. It is our policy to respond to notices of alleged infringement that comply with the DMCA and other applicable intellectual property laws. It is our policy to remove material from public view that we believe in good faith to be copyrighted material that has been illegally copied and distributed by any of our members or users.

About Us - Disclaimer - Privacy Policy



Advanced Search
Username:

Password:

Remember Me
Forgot Password?
Register

It's "An Extortion Racket:" Police Chief Moved to Tears After Exposing Corruption in His Department - 11/25Good Samaritan Hands Lost Purse To Cop, Cop Steals Cash Before Returning - 11/25This is What a High School Football Game Looks Like In a Police State - 11/21Albuquerque Cop Who Killed Homeless Man Will Retire With Full Benefits - 11/25Cop Keeps Job After First DUI, Now He's Being Charged With A Second - 11/25Darren Wilson and the Protocols of Official Exoneration - 11/25This Minnesota Mom is Facing 2 Years in Jail for Saving Her Son's Life - 11/25Tamir Rice: 12-Year-Old Boy Playing With Fake Gun Dies After Being Shot By Police In Ohio Park - 11/24

Rialto, CA Police Made to Wear Cameras, Use of Force Drops by Over Two-ThirdsCop Who Karate Chopped NY Judge In Throat Gets Off Scot-FreeFlorida Cop Smashes Compliant Woman's Face Into Car -- "Maybe Now You Can Understand Simple Instructions"VIDEO: Lapel Cam Reveals A Day In The Life Of A U.S. Police Officer (Tasing, Beating, Breaking & Entering, Stomping On Heads... and Laughing About It)Caught On Tape: Officer Sucker Punches Inmate In Face, Files Report Claiming 'Self Defense'Insult Person On Twitter, Go To JailSWAT Team Brings TV Crew To Film Raid Against Threatening Internet Critic -- Raids Innocent Grandma InsteadCop Karate Chops NY Judge In The Throat
(more)

 
Top