Dairy Farming Question

[ZAHNISER_S@xxxxxxxxxxxxxxxxx]

The analysis made by Cindy Cotter's non-economist friend (that price supports
hold prices down, apparently by preventing a shakeout of smaller producers
that would lead to oligopolistic pricing by the remaining producers) doesn't
seem plausible to me.  I am not familiar with the structure of the dairy
industry, but my guess would be that the entry costs are not so prohibitive
that a handful of producers would be able to get away with setting prices.

I do recall several years back that a number of dairies had successfully
conspired to split up the market in several Texas school districts and do
some price fixing, but I think it would be much harder to do this when
dealing with grocery store chains.

Cindy, what sort of other things did the people in this discussion say?
Did they provide any details about the way the U.S. dairy industry is set up?

Steven Zahniser
zahniser_s@xxxxxxxxxxxxxxxxxxx