More on the Milk Tax

I’ve harped on the Arkansas Milk Stabilization Board a couple of times in the last week (here and here). The board is considering a “fee” to be imposed on milk wholesalers to help bail out the state’s struggling dairy farmers, which, any way you slice it, has to be seen as a stealth grocery tax that will be passed on to consumers.

Rob Moritz of the Arkansas News Bureau reported on the matter yesterday, and digs up a compelling statistic:

In the past 15 years, the number of family-owned dairy farms in the state has dropped more than 80 percent from more than 800 to less than 160. (emphasis added)

Arkansas’ dairy farmers, who once produced all of the milk processed in the state, now produce just 25 percent, with the rest shipped into the state.

Consider that for a moment: The number of dairy farms in Arkansas has dropped by 80 percent….yet we’ve seen no disruption in supply or significant price increases. Why, I was just at the store last week, and sure enough, those coolers were full of milk, butter, cheese—every dairy product you could want.

So when advocates of this fee try to tell us that it’s needed to ensure a supply of milk for Arkansas, they can be safely ignored, right? Supply concerns are simply not relevant to the debate, given the innovations in transportation and refrigeration that have allowed Arkansas to enjoy a reliable and safe supply of milk from other states.

And a “to his credit” moment: Democratic legislator Johnny Hoyt of Morrilton, who sponsored the legislation to create the milk board in 2007, is dubious of the fee proposal in the Moritz story:

I do have concerns that (a fee) would be passed on to consumers. I think this would be a hard sell to the Legislature,” he said. “I wanted (the board) to find a way to help dairy farmers … I’m hoping they’ll continue to look at other options.

The board meets again Sept. 18, Moritz reports, to consider the milk tax. The Arkansas Grocers and Retail Merchants Association is also on record opposing the proposal.

Update: In the comments section, readers debate my “no significant price increases” statement about the price of milk. To clarify: Obviously, milk is more expensive today than it was in 1993, and it’s gone up quite a bit even in the last year (as have pretty much all food prices).

But that seems to be more a function of higher prices generally and a function of multiple factors aside from the number of dairy farms in Arkansas, of which there are significantly fewer. And the milk tax proponents aren’t making the argument that their scheme will make milk less expensive—they want to boost the cost further by imposing a fee to benefit dairy farmers.

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7 thoughts on “More on the Milk Tax

  • August 25, 2008 at 7:39 am
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    “or significant price increases.” You must be like Ace Mc Cain and have no recollection of what the price of milk was just 12 short months ago. You know Ace don’t you? He single handedly has wrecked so many planes he was nick named reverse ace.

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  • August 25, 2008 at 9:21 am
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    Please pardon my nephew guys. He is a moron. Of course milk is more expensive today, but not because of the decrease in arkansas dairy farms. It is more expensive everywhere.

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  • August 25, 2008 at 10:13 am
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    I am just too darn stupid to compare the degree to which milk prices have risen to the degree to which all food prices have risen in the last year, so instead I must change the subject to John McCain!

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  • February 26, 2009 at 6:17 am
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    who drink’s the most milk? baby’s. who has the leased money? baby’s

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  • March 3, 2009 at 11:03 am
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    I am getting tired of our local and federal government. I am frustrated that all they want to do is tax tax and tax. I have heard Beebe say that there is no deficit in Arkansas and that there is still money in the bank. Yet, we are paying our highway department triple time for working on Thanksgiving Day. Yes, I saw them out there between Little Rock and Memphis. STOP raising our taxes and give us back the money that we paid in without reservation. Stop saying this isn’t enough, we need more. We, the taxpayers and good citizen’s of this great nation, have had enough. Leave us alone, you don’t need any more of my money, nor any more of my neighbors money. Leave milk alone, you got your higher taxes with the cigarettes.

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  • March 27, 2009 at 2:26 pm
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    If the government wants to help the farmers then reduce their taxes but don’t increase ours. It is a better approach for anyone that is interested in re-election.

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  • March 30, 2009 at 9:06 pm
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    Gov. Beebe- pulls the Milk Tax!

    The Governor’s office received so many phone calls from a protest that originated in Northwest Arkansas on Friday that Gov. Beebe met with Rep. Hoyt. Hoyt and Hoyt agreed to expunge the vote on the Milk Tax in exchange for Gov. Beebe finding existing state funds to subsidize state dairy farmers.

    Watch out in 2 years!!

    Reply

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