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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: mishedlo who wrote (102113)	9/17/2009 2:05:31 AM
From: Hawkmoon	1 Recommendation Read Replies (3) of 116555

Some must think so because Dairy Farmers Want Industry Probe. ... Yeah.. hearing the same thing hereabouts in Idaho.. We're a huge dairy state as well (but I guess that wasn't worth mentioning.. ;0) We have a number of 10K size herds in the local area, and quite a few 4k-5k facilities. There are about 12 gallons per hundredweight. At $11.80 per hundred weight, that's less than a $1/gallon collected by the actual producer of the milk. Go to your local grocery store and look at what it costs for a gallon of milk at the retail level. Hereabouts it's STILL in the $3/gallon range, and since the local community is primarily agricultural (read minimum wage), most can't afford to drink much of the stuff, despite the fact that we produce so much of it. Thus, someone's netting $2/gallon in sheer profit (or at least $1.50/gallon) while the dairymen are being screwed. And the suspicion is that it's the creameries that are making the major profit here, and actually represent a near monopolistic presence. The argument is that, were the price of milk to fall to $2/gallon retail, demand for it would increase and support raw milk prices. Hawk

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