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A Fair Share Law for Connecticut and Other Northeast Dairy States: A State Level Solution to Retail Milk Price Gouging and the Dairy Farm Crisis

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  • Ronald W. Cotterill

    (University of Connecticut)

Abstract

Price gouging is commonly perceived to be a consumer issue, however it also is a farmer issue. Currently, retail fluid milk prices in New England are as much as a dollar per gallon above supply costs (Cotterill et al. 2002; Mohl 2002). Yes, consumers are paying too much; but farmers are also receiving too little. They are experiencing the lowest milk prices in 25 years. Similar problems have persisted in the Northeast dairy industry for at least a decade. In 1991 the New York State Legislature passed two laws that aim to redress the pricing power imbalance that farmers and consumers face. We will discuss and compare those laws to the law proposed here. In New England, but for the Dairy Compact era (1997-2001), there is little relationship between raw farm level and retail consumer level fluid milk prices (Wang et al. 2001, Cotterill and Franklin 2001, Cotterill et al. 2002). It is especially true that when the raw fluid milk price has dropped, retail prices have not fallen in a commensurate fashion.

Suggested Citation

  • Ronald W. Cotterill, 2002. "A Fair Share Law for Connecticut and Other Northeast Dairy States: A State Level Solution to Retail Milk Price Gouging and the Dairy Farm Crisis," Issue Papers 29, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    • Handle: RePEc:zwi:ipaper:29
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    File URL: http://www.zwickcenter.uconn.edu/documents/issuepapers/ip29.pdf
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    References listed on IDEAS

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    1. Cotterill, Ronald W. & Dhar, Tirtha Pratim, 2003. "Oligopoly Pricing with Differentiated Products: The Boston Fluid Milk Market Channel," Research Reports 25189, University of Connecticut, Food Marketing Policy Center.
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    1. Cotterill, Ronald W., 2003. "Dairy Policy for New England: Options at the State and Regional Level," Research Reports 25176, University of Connecticut, Food Marketing Policy Center.

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