The price consumers pay for milk fell slightly last month. But it
wasn't enough for network news reporters. Farmers complained that
the wholesale price they sell milk for had dropped even more and
that they should be getting more money from stores and processors,
or consumers should be paying less.
Not one network reporter was curious about the dairy farmers'
sudden concern for consumers. They didn't report that federal
subsidy programs have long benefited farmers at the expense of
The networks didn't mince words, though, in describing what they
saw as a corporate milk conspiracy. "Is a bully taking your milk
money?" asked Dan Rather on the February 18 CBS Evening News.
He thought so: "After a big jump in the wholesale cost of milk last
year, farmers have lowered their prices. But...supermarkets and
others are not passing the savings on to you."
A few days later, on the February 21 World News Tonight,
Peter Jennings introduced a report on "who is getting fat off the
milk you buy." Correspondent Erin Hayes reported that "agriculture
economists say there is no good way to pinpoint exactly who is
profiting, and they say for now there is little pressure on those
who do make money on milk to drop their prices." Hayes interviewed a
dairy farmer who told viewers that "the consumer is getting ripped
and we're getting ripped, too."
CNN concurred. "Dairy farmers say they are being milked,"
announced Linden Soles on February 25. "The price that dairy farmers
get for their milk has plunged 29 cents per gallon since October.
That has translated into only a five cent per gallon price cut for
Not one of these reports noted that consumers have been getting
milked for decades by federal policies that keep milk prices
In the February Consumers' Research, Jonathan Tolman and
Clark Massey of the Competitive Enterprise Institute write that
according to the USDA, if federal dairy pricing rules "were
eliminated, consumer expenditures on fluid milk alone would drop 14
percent." This means that consumers are paying "an estimated $2.7
billion a year in higher milk prices," in addition to what taxpayers
must pay to fund the program.
And this is only the beginning. Tolman and Massey also argue that
the government's convoluted pricing scheme, which they call "a study
in econometric vertigo" (see table), discourages efficient
production and keeps milk producers from specializing. "What
innovations could have occurred had the incentive structure been
better?" they ask. "No one knows, but the losses from foregone
innovation and specialization probably are significant."
But these are consumer problems caused by the government rather
than ones addressed by the government. They therefore go unreported
by the national media.