Spilt Milk: COVID-19 and the Dangers of Dairy Industry Consolidation

Eileen Appelbaum () and Jared Gaby-Biegle
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Eileen Appelbaum: Center for Economic and Policy Research
Jared Gaby-Biegle: Center for Economic and Policy Research

No inetwp134, Working Papers Series from Institute for New Economic Thinking

Abstract: Consolidation came later in the dairy industry than in other agricultural sectors. A long history of dairy farmer cooperatives owned by their farmer members and vertically integrated to produce and distribute fluid milk and cheese products staved off industrialized farming and horizontal consolidation. But by 1990, advances in technology and a change in antitrust regulation enabled investor-owned firms like Borden Dairy and Dean Food as well as large farmer cooperatives like DFA, Prairie Farm and Land O’Lakes to dominate the industry. Consolidation and the pursuit of economies of scale led to two inflexible and separate supply chains in dairy – one serving retail markets for consumers, the other serving commercial markets for institutional customers. The COVID-19 pandemic and economic lockdown revealed the lack of resilience and risks in a system dominated by a few large actors. Viable reforms in the dairy industry that limit the domination by powerful actors can achieve resilience and improve the ability of the dairy industry to respond to disruptions.

Keywords: Dairy Industry; Industrialization; Consolidation; Monopolization. (search for similar items in EconPapers)
JEL-codes: L11 L12 L41 Q13 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2020-08-15
New Economics Papers: this item is included in nep-agr, nep-com and nep-ore
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Persistent link: https://EconPapers.repec.org/RePEc:thk:wpaper:inetwp134

DOI: 10.36687/inetwp134

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