Friday, January 11, 2013

The Canadian Milk Cartel

One of the really obvious differences between the US and Canada is the price of milk. In the US, you pay $3.30 or less for a gallon (3.79 liters); in Canada the price is usually something like $4.60 for 4 liters or even more.

Why? Because of a crazy marketing system controlled by the dairy industry, with government backing, that regulates how much milk you can produce. You even have to pay for the right to produce milk!

When we lived in Boston, we enjoyed Chobani Greek yoghurt. Chobani was going to build a plant in Ontario, but has been prevented from doing so by Canada's ridiculous quota system.

Canada should dump these stupid marketing boards that drive up prices for consumers and prevent innovation.


Anonymous said...

Only half the story I believe .
In Canada market boards keep the price high.
In the U.S. tax subsidies keep the price low.

Mark said...

It's estimated that without agricultural subsidies, the price of milk in the US would double to triple. Agriculture in the US is heavily subsidized.

Agriculture in Canada is less heavily subsidized, which is why we have marketing boards instead. You'll notice that the price we pay is less that what the Americans would likely pay if they didn't have subsidies.

It's also worth noting that Canada is actually the odd man out among industrial nations, in terms of the lack of agricultural subsidies.

Just a little reminder to do some independent research before getting worked up about something you read in the Notional Pest.

Jeffrey Shallit said...

I would be happy if all agricultural subsidies are removed, too. I'm more annoyed at the fact that a company like Chobani can't produce what they want because of arcane rules.

Mark said...

The big "compromise" bill passed the other week and signed by President Obama included a reauthorization of dairy subsidies of the Farm Bill--without which the price of milk was expected to rise to $7 to $8 per gallon. I guess that was part of the "too much pork" that led 67 Republican Representatives to vote against it.
--Mark D.