Word: milke
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Dates: during 1980-1989
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...recent years two forces have thrown the system out of kilter. One is the outdated Government index known as "parity." Its purpose is to make sure that milk retains, relatively speaking, the same value in 1981 that it had before World War I. Improvements in dairy technology have now boosted productivity dramatically, but the rickety parity index has never been updated, causing the price of milk to stay artificially high...
...other force frustrating efforts to keep the system in check has been the lobbying expertise of the milk producers, who have consistently fought reform. Their biggest gains have come from passage of a 1977 amendment that has boosted the minimum price that the Agriculture Department is required to pay for surplus dairy goods from 75% of parity to 80%. The amendment further requires the Government to readjust support prices twice a year to keep pace with inflation. Result: even at 80% of parity, the U.S. now pays $1.50 per Ib. for butter, 50? more than the world wholesale price...
Some dairy food processors, like Land O' Lakes Inc. of Minneapolis, have figured out another way to milk the program. There is a loyal consumer market for aged Cheddar cheese, which has a sharper taste than new Cheddar. Since storing the cheese would tie up the companies' capital, companies sell the cheese to the Government as a surplus dairy product, at anywhere from $1.36 to $1.39 per Ib., then buy it back at only a 10% markup six months or so later when the cheese is ready for market. The arrangement sticks the Government with the storage...
...program's immediate fault is its excessively generous parity level. A recent Agriculture Department tally found that after 27 years of diminishing dairy herds, dairy farmers last year added 72,000 milk cows, even though the only market for the extra output was the Government. When the dairy program comes up for a four-year renewal vote in Congress some time before Sept. 30, the Reagan Administration is planning to push for leeway to drop dairy-support prices to 70% of parity, or even lower if especially large surpluses occur...
...dairy industry is ready to fight the Administration's cutback proposals. The lobby's position is that the price supports are simply helping dairy farmers to make a reasonable profit, which only appears large when compared with other farm earnings. "We are producing too much milk," concedes Dairy Lobbyist Patrick Healy, "but the price-support program exists to ensure an adequate supply of milk. It does that...