Milking Consumers

March 10, 1995

Once again, Maryland's dairy industry is asking the General Assembly to create a state milk commission to lift dairy prices. Gov. Parris N. Glendening, who often speaks of the need for government to get out of the free market's way, has nevertheless endorsed this special interest legislation.

Local dairy farmers complain that Pennsylvania and Virginia producers, supported by their milk commissions, are dumping excess product in Maryland and depressing raw milk prices here. A price support program in Maryland would help local dairy farmers remain in business, proponents say.

A milk commission will not, however, solve dairy farmers' basic problem -- national overproduction of milk. This plentiful supply is responsible for driving down prices.

Despite declining herds, dairy farmers are producing more milk than ever. In Maryland in 1970, 155,000 cows produced 1.34 billion gallons of raw milk. Last year, despite the drop in the state's dairy herd to 93,000 cows, they were able to produce 1.2 billion gallons, or virtually the same amount.

Carroll County, Maryland's second most productive dairy subdivision behind Frederick County, has 16,000 cows producing 209 million gallons of milk each year. Frederick County farmers produce about 450 million gallons of milk each year.

This tremendous efficiency, coupled with technological developments such as genetically-engineered hormones that stimulate milk production, means that milk supplies will be plentiful for the foreseeable future. Compounding the problem is the lack of growth in dairy consumption, which is caused by everything from fat fears to cola wars. The result of this abundant supply and weak demand is low prices.

A milk commission that unnaturally seeks to inflate the price of "nature's perfect food" will be a short-term palliative at best. Maryland consumers will bear the cost. Ultimately, the higher prices to local producers will do little to stop the flood of less expensive out-of-state milk from coming in. As much as we may like the idea of having local dairy farmers, their product is not unique. There is no reason to prop up a non-competitive local industry when Pennsylvania, Virginia or Wisconsin milk is the same as Maryland's.

It is surprising that Del. Donald B. Elliott, a Republican from Carroll and Frederick who is normally a free-market proponent, authored this misguided intervention in an efficient market. His bill needs to be put out to pasture.

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