MILK PRICES are coming down. Giant Food, the area's largest grocer, plans to lower its charge for a gallon of milk by six or eight cents. Given the chain's size, that will reverberate throughout the Baltimore-Washington region.
But what is a positive for customers becomes another negative for this state's dairy farmers. They are caught in a bind: Fewer farms are churning out more gallons of milk; not surprisingly, the mandatory price for milk at the farm level -- set by the federal
government -- has just been cut in this region.
Forty percent of Maryland's dairy farms have closed in the past 10 years. This latest setback won't help matters. Still, there is little dairy farmers can do in the face of market conditions that dictate lower prices for their product.
Matters may not improve as Washington begins to phase out its price-support program. That robs dairymen of a key safety net. Yet it also should allow market forces to function more naturally, without government interference.
You can't blame the farmers for wanting to retain price supports. That is why there is once again a movement to push state legislators for a law setting Maryland milk price controls. That measure was defeated this spring in Annapolis. The current actions on milk prices illustrate why state-imposed controls would hurt consumers while not helping farmers.
Under a price-control system, supermarkets could not lower milk prices. The state would impose a minimum price for all retailers. No discounts or special sales allowed.
Yet farmers would not reap any rewards from such a program. Why? Because the farmer's price for milk is determined by Washington.
Consumers lose if government artificially hikes the price of milk. The poor are especially hard hit. Milk is essential for young and growing children. Dairy farmers are in a troubling predicament but one that cannot be helped by imposing a mandatory state pricing system at the retail level that unfairly penalizes millions of Maryland milk purchasers.
Pub Date: 6/14/97
