Friday, May 25, 2007

Milk, Oil and Corporate Profits

Yesterday, I bought a quart of milk at a neighborhood store: cost $1.33. Last week it was 99 cents – it's been 99 cents for a while. I said to the store manager, "Damn, the price of milk sure went up." "Yeah," he said emphatically.

Today's news report's a worldwide milk price increase. The increased costs being fueled in part, according to bourgeois economists by an end to farmer price subsidies, low supply, and growing demand from India and China. At least, that's one rationale. Another is ethanol. According to a Daily News story, hybrid fuels t are the culprit:

"Economists say the situation is fueled in part by the demand for clean-burning ethanol, which is made from corn, the primary feed for dairy cattle. When farmers feed their cows less corn, milk production falls."- We are putting food in our gas tanks instead of our kids."

However the Akron Beacon Journal, says it's not the cows, fault:

''We will see some rationing in the months ahead because you can't make the cow make more milk,'' said Ken Bailey, an associate professor at Pennsylvania State University who studies dairy markets."

Why blame the cows? What about corporate profits. Speaking of which, dairy farmers, were among those that gained from recently approved war spending bill according to an AP story:

"Dairy farmers have won an extension of a program that helps producers with a partial subsidy when milk prices drop below a certain level.The extension of the Milk Income Loss Contract program is included in the Iraq spending bill that was passed by the House and then also passed by the Senate."

The subsidies will be extended for one month. It's unclear whether this will help small farmers or the big agribusiness corporations. In any event it's doubtful it will impact the price paid by the everyday consumer, prices that are expected to rise at least through October, along with price of gas.

Indeed that's the other big economic story as summer approaches. With gas at $3.14 a gallon, the gas price have equaled their highest ever rise. Now wonder, the country is fed up with Bush's policies. Nearly two-thirds, according to today's Times are opposed to the war. And that along with only 25 percent of the people believing the US is going in the right direction according to last week's AP-Ipsos poll.

It looks likes it's gonna be a long hot expensive summer of discontent.
--joe sims

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