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Re: Question for Bruce on milk marketing???


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Posted by John in La on December 02, 2015 at 11:47:06 from (96.33.136.54):

In Reply to: Re: Question for Bruce on milk marketing??? posted by NY 986 on December 02, 2015 at 08:08:48:

"Canadian quota system but it probably has given small dairies a better chance to survive"


In the short term YES
In the long term NO

We have seen it in the cane sugar industry.
First you start with a import tariff that artificially raises the price so that locals can compete.
Now everyone wants in so you put in a quota system.
So now farm A B C and D have quotas.
Now farm A decides to sell out because his kids do not want to take over.
His choice is to sell his quota to farm B C D or a outsider.
The outsider has a hard time getting started because now he has to come up with 1 to 2 million extra dollars to get in.
It is much easier for farm B C or D to buy him out because it is a expansion rather than a start from new operation.

So you have B buying A today and C buying D next week and B buying C in 20 years.
Now C owns all 4 farms because a outsider had the added expense of the quota to contend with.
So the only way to get started was to inherit your original farm.


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