Zachary Yost: When will Pennsylvanians stop being bilked for milk?

Over 200 years ago, the great Scottish economist Adam Smith warned: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” Although Smith wrote these words so long ago, he might have been commenting on the dismal state of the present-day Pennsylvania dairy industry.

Thanks to the dairy industry and state regulators, Pennsylvanians have been forced to overpay for their milk for decades, and with prices at the highest they have been in years, it is time to put a stop to it.

It is likely that very few Pennsylvanians have ever heard of the Pennsylvania Milk Marketing Board (PMMB), let alone have any idea what it does, or how it costs them money every year. The PMMB is the state agency responsible for setting both the wholesale and retail mandatory minimum prices of dairy products in Pennsylvania. These minimum prices are changed monthly in six different milk marketing areas across the state. Pittsburgh is in Area 5. This process, the PMMB assures us, “allow(s) Pennsylvania to manage more effectively the marketing of milk and promote the interests of Pennsylvania consumers.” Yet such a claim falls apart under the barest of scrutiny.

The PMMB is nothing other than a price-fixing scheme that benefits the various parts of the dairy industry at the expense of everyone else in Pennsylvania. The consumer is the last person such a law benefits. In December 2019, the minimum price for a gallon of 2% milk in Area 5 was $4.01. Yet the average price of a gallon of 2% milk in the Cleveland area that month was $2.82, according to statistics compiled by the U.S. Department of Agriculture. This is a difference of $1.19.

This average hides the true extent of the disparity. Simply by using the Walmart app, one can see that stores in the Cleveland area are selling their store-brand 2% milk for a mere $2. Whole milk also costs $2, unlike here in Pennsylvania, where it is mandated by law to cost more.

It truly requires an act of Orwellian double-speak to make the argument that making citizens of the commonwealth pay twice as much for their milk is somehow for their benefit. This blatant scheming only benefits the dairy industry, who will, of course, insist that the situation is actually much more complicated than this and that their industry requires special protections.

It is understandable why the dairy industry would favor such protections and mandatory high prices, but it is not clear why it is entitled to this special protection while other industries are not. No doubt dairy’s large role in the state economy and various claims of “special circumstances” form the basis for attempts at defending fleecing consumers.

Agribusiness is the largest industry in Pennsylvania, the PMMB tells us, “and dairy is the largest segment of this industry.” The Center for Dairy Excellence reports that “statewide dairy production and associated businesses contribute more than $12 billion annually to Pennsylvania’s economy.” But does being part of a large industry mean the government should grant a business special treatment? Wouldn’t it be convenient for the state to mandate that customers have to pay your business higher prices?

Our elected officials should start representing the vast majority of us who are being forced to pay more for a basic essential like milk and stop kowtowing to the dairy industry. Most businesses have no special protections from the state, let alone one that mandates higher prices for its products. It is time for the Pennsylvania dairy industry to stand on its own two feet and get back to milking cows rather than bilking consumers.

Zachary Yost is a Pittsburgh freelance writer and researcher.