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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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  • Cotterill, Ronald

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

  • Cotterill, Ronald, 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 169386, University of Connecticut, Food Marketing Policy Center.
  • Handle: RePEc:ags:ucofmi:169386
    DOI: 10.22004/ag.econ.169386
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    File URL: http://ageconsearch.umn.edu/record/169386/files/ip29.pdf
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    References listed on IDEAS

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    1. Dhar, Tirtha Pratim & Cotterill, Ronald W., 2002. "Two-Stage Oligopoly Pricing With Differentiated Product: The Boston Fluid Milk Market," 2002 Annual meeting, July 28-31, Long Beach, CA 19872, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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