There are dairy co-ops where I live that do this sort of thing. That's why they're so huge. However the small ma and pop ones that have local well known businesses charge an arm and a leg for half a gallon of milk. Yeah sorry, I'll pay half that cost for a gallon at walmart, thanks.
I was fascinated to hear a recent news story about how this works. The US has a long history of subsidizing its dairy industry (not unlike other countries) and part of that has been a "price floor" on milk. This floor applies to retailers purchasing milk from producers / distributors, but if the retailer also owns the producer... there's no retail price floor. Hence, the fairly extreme price difference between a regional dairy's milk and Great Value.
Milk pricing is complicated, and I don't really understand it, but I don't think your comment is correct. There exists a "price floor" on a national level that establishes a minimum price that is payed to producers. This price differs based on location, which acts as a proxy for price of production.
But I'm pretty sure there is no mandated federal minimum retail price, although some individual states (Maine, California, Pennsylvania, probably others) have state-specific laws regarding retail pricing. Are you maybe confusing a state law where you live with national policy? Or am I out-of-date?
I am surprised by how inexpensive compared to local brands Walmart's Great Value milk is where I shop in Vermont. My guess was that this is because the local brands pay their producers at the higher North-Eastern rate, whereas Walmart sources their milk from the mid-West and can pay a much lower wholesale price.
Dairy is an abusive industry in the United States and heavily subsidized. It costs more per gallon than the sale price per gallon. Dairy farms are dying. The mid west is thrilled about hemp farms..it’s expected to save a lot of farms. Until it doesn’t. But that’s another discussion re hemp.
The people who make money on dairy farms are the ones who chemical companies and pharmaceutical companies. The cost of raising milch cows eats away at margins. Dairy farmers survive because of subsidies until they have to keep producing more and more ..they stretch and stretch and then they collapse. Tragic.
Your choice unfortunately affects the greater world. Which would you rather have- a locally-produced society that's expensive to live in, or a Walmart society that's convenient to live in?
It makes sense for the local optimisation of the individual to go for the walmart society - after all their single choice won't make a difference to anything other than their bottom line
It makes sense for people as a whole to optimise as a society and have the locally produced society
That's where we can choose an economic system that ensures that we optimise in general rather than individually, so we avoid the prisoner's dilemma type problems.
I've come to the same conclusion. Never before in history have people truly optimize while thinking of themselves as a whole- the second something more convenient was offered, they took it immediately. I think that we're at a place in human history where we desperately need every person to step back from convenience in order to optimize for society.
This is the point of government and regulation. We're not going to get far relying on willpower and rational thought in individual decision-making. So we use government as tool to help use out.
I can't stop myself from eating an entire of package of Oreos if they're in the kitchen. So I don't buy them. I don't give myself the choice, because I know I'll make a bad one. Instead, I choose to restrict my choice (and the choice of the rest of my household) for our overall well-being.
This feels pretty bad if you're a 10-year-old and just want some freaking cookies. Sorry you weren't able to make your own choice there. Our overall well-being took priority over your individual liberties. I get why that is unacceptable to some folks, but there has to be some balance, and sometimes that means restricting personal liberties in order to maintain the health of the overall system and community.
To be fair all attempts at optimization on a grand scale like that give a new meaning to calling "premature optimization the root of all evil" as it starts including things like Eugenics and Inquisitions. It inevitably ends in failure, tears, and travesties. Or more pedestrian Soviet style lack of market failures.
Local is "sexy" but it has had worse efficency instead of better like promised and is often premised upon overassumptions of the cost of transit and a denial of inconvenient fact of economies of scale because it doesn't fit their world view.
It appears that part of the reason it is popular is because people think they understand it and think the logistics would be easier. I would put it in the simple, easy, and wrong camp of ideas.
As far as the individual goes, I think the locally optimal decision differs if you care about the difference in quality of taste from the non Walmart milk, or in the quality of life in the cattle that produced it.
Makes me consider Douglas Hofstadter's superrationality. Hofstadter provided this definition: "Superrational thinkers, by recursive definition, include in their calculations the fact that they are in a group of superrational thinkers."
Around here, there's a chain of grocery stores that costs less than Walmart for better quality, locally sourced dairy (not milk though), meat, fruits, and vegetables. Boxed goods are usually cheaper at Walmart, though.
I'd rather have milk be readily available at $2.19 USD/gal than subsidize local farms.
I make six figures and I can get by at $4/gal but if/when you apply that reasoning to subsidies/protectionist regulations across the economy my ability to purchase goods and services is greatly reduced and so is my quality of life. I'd get by though. But it's not about me. It's about the family making half of what I make with three children that need to be fed and clothed. They're the ones who really get screwed when you hike the prices of commodities with protectionist measures. So given the choice of who gets screwed I'd pick the local dairy farmers every time.
