People who have been dairy farmers there whole life, like 82 year old Mary Cameron, are losing money. In fact, Cameron is losing 40K/month! From the article:
Today, Cameron owes $7.5 million to her banks and creditors, and has run out of cash for feed. To make ends meet, she has sold cows for beef and fed her herd less grain — but that means milk production is down and so is revenue.
Cameron recently saw a bankruptcy lawyer and may have to sell her entire herd and dairy.
"It just makes me sad," Cameron said. "This is a world I love, this is my life."
How did this happen? Whose fault is it? Too much competition? Poor management? People drinking less milk? Mary Cameron thinks she knows:
For her woes, Cameron blames state officials' decision to keep milk prices lower than those in other states.
Wait. What? The problem according to Cameron is that the California government didn't keep the price high enough? So according to Cameron, the government is responsible for keeping the price of milk high enough for her to make money. And if they don't well that is just not fair.
But what about consumers? Why should everyone pay a higher price for milk so that Cameron can keep her farm? As the article states:
CDFA spokesman Steve Lyle said the reason for lower prices is that milk supply exceeds demand in California.
What Steve Lyle meant to say is that the quantity supplied exceeds the quantity demanded, but that aside, no one wants to buy the milk that Cameron is producing for the price that she wants to sell it at. Yet she, and other farmers, think that us consumers should be forced by the government to pay a price that suits them. It never ceases to amaze me that articles about agricultural price floors never mention the effect of high prices on the consumer.
Not only are price floors bad for consumers in that they artificially reduce consumer surplus, but they also create a deadweight loss, which is bad for some producers and consumers.
California needs some dairy farmers to go out of business and the state government needs to quit fixing prices so that a market equilibrium can be reached in which the quantity demanded equals the quantity supplied. If not, consumers will bear the burden of keeping inefficient farmers like Mary Cameron in business.
"That's where I belong," she said, "...that's where I've been all my life."
No Ms. Cameron, the market says that is not where you belong. And it is not the responsibility of milk consumers to artificially support your lifestyle.