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'Get Milk' for the Right Price

April 18, 1999

California's milk prices are, on average, the nation's highest, though not because it costs a lot for the supermarkets to "get milk." California is king of the U.S. dairy world, with mild weather, big, modern dairy operations and the nation's lowest production costs.

Instead, the state's high prices are a result of industry-tailored regulations that require fortification of most milk with extra milk solids and that allow supermarket chains and dairies to artificially inflate prices. Two bills that would eliminate those rules come up for key votes this week and, not surprisingly, the state's $3.7-billion dairy industry is vigorously lobbying for their defeat.

The more important of the bills, by Sen. Jackie Speier (D-Hillsborough), would eliminate a law that allows supermarkets to set an arbitrary floor on milk prices and then prohibits competitors from selling milk below that price.

The second bill, by Sen. Debra Bowen (D-Marina del Rey), would allow the sale of non-fortified whole milk in California. After an oversupply in 1962, the state's dairy lobby had required that solids be added to "fortify" all milk sold in the state. This artificially boosted demand.

The dairy industry now argues that the law ensures that Californians get enough protein and calcium in their diet. But as reputable public health groups like the Center for Science in the Public Interest have correctly pointed out, "milk is an excellent source of calcium without added solids and Americans' protein consumption already exceeds recommended levels."

Few dispute the dairy industry's claim that California's milk has a better texture and flavor than milk sold elsewhere. Consumers, however, deserve the right to choose between buying fortified and unfortified milk.

California supermarket chains say their recent decision to reduce milk prices by as much as 50 cents per gallon undermines the need to change the state's milk-pricing laws. In fact, the ease with which they manipulate prices only underscores the need. Milk prices should be set by free market forces, not dubious schemes.

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