FROM THE FRONT LINES
by Liz ThorpeOn the heels of Zoe's entertaining, but sobering look at the increasing costs of food production in our current world, I wanted to add
my two cents. I've been in Wisconsin all week, visiting cheesemakers while Rob eats gross amounts of cheese as a judge at the World Championship Cheese Contest. I spent Tuesday morning with George and Debbie Crave of Crave Brothers Farmstead Cheese, and the topic of milk increases came up. George summarized the macro-level for me this way:
The cost of milk, and cheese, is based on the Chicago Mercantile Exchange Board's valuation of block cheddar. That's where "value" begins in the U.S. Now, if the demand for powdered milk increases (as is the case in our current market, since the greatest demand is occurring in 3rd world countries that can't generate their own milk, but can buy powdered from anywhere), the demand for block cheddar decreases. If the demand for block cheddar decreases, then the
valuation decreases. So, larger cheesemakers have 2 options: 1. They can make powdered milk, a sure sell, in the current market or 2. They can gamble on block cheddar, not knowing how the market will value that cheese in the future, after it ages.
For the dairymen who own and milk cows, but may not (are often not) making cheese, a decrease in the demand for block cheddar means more animals are sent to slaughter. Why pay to feed animals whose milk is devalued as cheddar is devalued? So, cows go to slaughter, and then,
guess what happens? Less cows a'milking, so less supply, so milk shortage, so milk becomes a premium commodity and increases in value.
The demand goes up as the supply goes down. Regardless of larger market forces. So there's a vicious cycle that gets spun each time block cheddar is devalued.
As George said, the cure for high prices...is high prices.
To deflate the price of milk doesn't mean it's any less expensive to produce. Instead there's an artificial goose to the market as milk is more or less available. I know this is basic economics, but we simply don't think about our food this way. Add to this cyclical rhythm certain unknowns like weather: if it's bad, farmers grow less food; if there's a severe drought, Australia cows produce less milk; plus other unknowns like what people in India and Nigeria want to eat.
At Murray's, we (and you too, most likely) we don't really think about block cheddar. It's not part of our world, right? Only, of course, it is part of our world. And being here in Wisconsin I am aware of it at every moment. From the tiny, off-the-grid sheep cheese maker I met on Wednesday, to the cheddar producer who makes 5,000,000 pounds of cheese a year (which, folks, is small by national standards), this cycle of supply and demand, fuel for transport, grain for feed, corn for ethanol, and national consumption here and abroad. They're intrinsically connected in a frighteningly abstracted web that doesn't acknowledge how expensive and laborious it is to make good food, real food, food without a lot of shit in it. Food from cows' fluid milk, not reconstituted powdered milk; food from cows that sniff air and see sky, not to mention cows that might actually eat hay or grass and not just grain; food from cows that don't milk 4 times a day thanks to extended lactation courtesy of rBST and other growth hormones; food
that gets made by hands, touched by people, turned on racks, or shelves, brushed, washed, aged, tended, packed and then shipped, at best, in trucks or planes running on gasoline that costs more than it ever did.
I'm no expert in this stuff, but being here this week makes me worry more than I already did about how we produce food, what we pay for it, and what's happening to family farms in America. They're getting crushed. Even as they make more money off their crops and their milk
than they have in 25 years. The whole thing bodes ominously.