NCPA - National Center for Policy Analysis

Soaking Milk Consumers In California

January 7, 2000

Four decades ago, California milk producers wanted to get rid of extra supplies -- as well as protect their markets from out-of-state competition. So they got a law passed which required milk sold in the state to have extra nonfat milk solids added to it.

It's the only state with such a law.

  • Dairies are required to add one-fifth of a gallon of dehydrated milk to every liquid gallon.
  • Add in the various subsidies and price guarantees California gives dairies and the result is protection against competition from out-of-state dairies -- which, of course, means the state's 31 million consumers lose at the checkout counter.
  • Last year, a state senator sponsored a bill which would have allowed nonfortified milk to be sold in the state -- provided it carried nutritional labels comparing it with standard, fortified California milk.
  • After the state's strong agricultural lobby killed the bill, its sponsor charged that the dairy industry was trying to preserve "a world where it's immune to economics of supply and demand, the rigors of competition, and the realities of a global marketplace."

Source: Virginia Postrel (Reason magazine), "Got Milk?, Forbes, January 10, 2000.


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