Tomorrow we revert back to one of the Post-New Deal’s greatest market interventions, “parity pricing” for milk. Expect milk to double to $7 per gallon as our government imposes 1949 price supports based on 1914 price levels.
The ultimate absurdity of the “dairy cliff” is that there is no need for federal intervention in dairy markets. The supply and demand for the vast majority of food products made in America function just fine without government price controls. The worst disruptions have perennially occurred for a handful of items such as sugar and corn, as well as dairy products, which are under political protection. Politicians have long exploited these disruptions to help drum up donations to their re-election campaigns.
There is no chance that farm-state congressmen will draw the lesson from the “dairy cliff” that they are unfit to rule American farmers, retailers and consumers. This looming debacle is further proof that the only way to reform farm programs is to abolish them.
But if we did that, what would happen to corn, and our ethanol mandate? Oh, the horror!