Is cow's milk less expensive because of the government subsidies?

[teo123]

I've heard many people (mostly vegans) say cow's milk is made significantly less expensive by the government subsidies. But does that claim actually make sense?
Obviously, the European Union and United States heavily subsidize the dairy industry, and the intentions of those subsidies is to make milk more affordable. However, do subsidies actually result in making a product less expensive? As far as I understand it, the general consensus of economists is that they usually don't.
For example, I think most economists agree higher education in the USA is so expensive because, rather than in spite of, the government subsidies. When government gives money to universities, the universities do not respond by lowering the price for students, they invest that money in luxurious school gymnasia and restaurants. And, since the school gymnasia and restaurants need to be repaired every now and then, the cost for repairing falls on students. So, government subsidies actually make higher education more expensive.
Why would the results of agricultural subsidies be any different?
I think the actual reason soy milk is more expensive than cow's milk is that soy milk you can buy in supermarkets is organic, and organic agriculture is significantly less efficient.

[Jebus]

I've heard many people (mostly vegans) say cow's milk is made significantly less expensive by the government subsidies. But does that claim actually make sense?

I think the purpose of subsidies is to protect smaller local farms from getting swallowed up by larger entities. If there were no subsidies, likely the market would be dominated by giant international companies. The price of the product is dependent on supply and demand, so it could go either up or down depending on market forces.

For example, I think most economists agree higher education in the USA is so expensive because, rather than in spite of, the government subsidies.

I definitely do not believe that most economists would agree to that claim.

When government gives money to universities, the universities do not respond by lowering the price for students, they invest that money in luxurious school gymnasia and restaurants.

Why would they treat the government money any differently from other sources of revenue, such as tuition fees and donations?

And, since the school gymnasia and restaurants need to be repaired every now and then, the cost for repairing falls on students.

First of all, newer buildings have lower (not higher) reparation costs.

The purpose of high quality facilities is to increase the number of high quality applications, which in turn increases university revenue (through higher tuition fees). One could also argue that new buildings are an effective way of boosting donations.

I think the actual reason soy milk is more expensive than cow's milk is that soy milk you can buy in supermarkets is organic, and organic agriculture is significantly less efficient.

Soy milk is not different from any other product. Some are organic and some aren't, and those that claim to be organic are on average slightly more expensive.

[teo123]

If there were no subsidies, likely the market would be dominated by giant international companies.

Why exactly? I mean, the large Croatian corporation Agrokor has famously received millions of kunas of help from the government (because it failing will have increased unemployment), for which the government received a lot of criticism.

The price of the product is dependent on supply and demand, so it could go either up or down depending on market forces.

The law of supply and demand, as far as I understand it, only applies to products with large profit margins.

I definitely do not believe that most economists would agree to that claim.

Why exactly?

Why would they treat the government money any differently from other sources of revenue, such as tuition fees and donations?

I am not sure what most economists think of donations. I am quite sure most economists don't think good about foreign aid, they think it creates perverse incentives and often backfires. So, I'd assume they think the same about donations.

First of all, newer buildings have lower (not higher) reparation costs.

As far as I understand it, generally no. Newer buildings tend to be bigger and involve modern technology (which often stops working).

The purpose of high quality facilities is to increase the number of high quality applications

How?

Some are organic and some aren't

Correct, but it is hard to find soy milk which is not organic, at least here in the city of Osijek.

those that claim to be organic are on average slightly more expensive.

Slightly? Well, soy milk is around 4 times as expensive as cow's milk (probably coming from factory farming) is.

[brimstoneSalad]

It's a mix of economy of scale and subsidies which reduce the price of milk. Subsidies come more in the form of purchasing unsellable dairy which provides security to the dairy industry preventing losses, and subsidizing feed products.

Dairy farms aren't building gymnasiums for the cows with the subsidies then having to upkeep those. They don't need to attract cows with good facilities: cows have no choice. A subsidy NOT decreasing the price of something is an unusual circumstance, not the other way around. A subsidy decreasing the price of something is uninteresting, a subsidy increasing the price is interesting as an area of study -- this is probably why you got that impression.

Most of the cost of producing soymilk is the processing, packaging, and distribution -- not the beans. Thus why organic vs. non isn't really much of a difference, and why subsidies on soybeans etc. likely help dairy more than they help soymilk (since if you feed cows soy to get milk, you'll use more soy producing dairy than soymilk, so the subsidies mean more to the dairy industry than they do to soymilk with already low cost of raw materials).

In theory, soy milk should probably be slightly cheaper than dairy milk if everything were equal in terms of scale and there were no subsidies. Diary milk, however, is one of the most efficient animal products (milk production is biologically much more efficient than tissue production), so the margin would remain pretty small. Most of the harm from dairy comes from the greenhouse gas production and other pollution and the harm to the cows, and the main market disadvantage is that dairy spoils so easily (vs dry stored soybeans which can be turned into soymilk or stored in proportion to demand).
Dairy has an advantage over soymilk too, though: flexibility in feed stock, if soy prices rise due to a bad harvest. So you'd probably see a little volatility in the market where dairy was occasionally slightly cheaper than soymilk, but overall soymilk would usually be cheaper just based on the cost of production.

Now if animal welfare laws were improved that could change drastically, and dairy could raise in price several times over because of the medical care, space, requirement to leave calves with mothers until weaned, etc.

[teo123]

Subsidies come more in the form of purchasing unsellable dairy which provides security to the dairy industry preventing losses

So, how does that make milk cheaper? If anything, it should make it more expensive. It allows the farmers to sell milk at a price so high they cannot sell all their milk.
Is there any research about it in peer-reviewed journals?

Most of the cost of producing soymilk is the processing, packaging, and distribution -- not the beans.

Maybe. Have some reliable source about it?

Thus why organic vs. non isn't really much of a difference

I can give you some reasons to think it is much of a difference, though I am not sure those are good reasons. I've read on Quora soy milk in Canada is usually non-organic and is actually cheaper than cow's milk. I've also read on Quora that sometimes farmers give soymilk to cattle to make them grow faster, which again makes perfect sense if non-organic soymilk is cheaper. But, again, I have no reliable sources about it, and you seem not to have either.

[brimstoneSalad]

So, how does that make milk cheaper? If anything, it should make it more expensive. It allows the farmers to sell milk at a price so high they cannot sell all their milk.

Teo...

1. Milk is not a monopoly, they have competition and price fixing is illegal.
2. Government prices are determined by agencies, not just any price the farmers want; it helps cut losses, it doesn't ensure profit on that surplus and there is usually still at least a *small* loss. The goal of the legislation and subsidies is to prevent failure of those farms by protecting them against loss, not giving them free profits.
Farmers prefer to sell to the public where there is profit. Relying entirely on government subsidies would not be a sustainable business model, but if those subsidies were ended then dairy prices would soar (minus occasional dips where it's dirt cheap) due to insurance and other factors to mitigate against loss and the market would be severely restricted & lose investment.

Is there any research about it in peer-reviewed journals?

I don't see why there would be. The world is not in preschool like you are. Is there research in peer reviewed journals about how two apples plus two apples equals four apples?
It's a pretty stupid question to even ask.

Most of the cost of producing soymilk is the processing, packaging, and distribution -- not the beans.

Maybe. Have some reliable source about it?

You can look up the commodity prices of soybeans.
https://bfy.tw/Pppa

I've also read on Quora that sometimes farmers give soymilk to cattle to make them grow faster, which again makes perfect sense if non-organic soymilk is cheaper.

When you're buying in that large quantity, organic vs. non can make some difference to a business. Farmers are not using packaged soymilk, so the margin means much more.

But, again, I have no reliable sources about it, and you seem not to have either.

Brilliant argument Teo, obviously you must be right because I have not provided enough "sources" to something stupidly obvious.
Believe what you want, I don't care, I was just giving you information. It's not my job to do your research for you.

[teo123]

Milk is not a monopoly, they have competition and price fixing is illegal.

How is that relevant? Artificially increasing the demand for some product drives the price up, whether or not there is a competition.

Government prices are determined by agencies, not just any price the farmers want

If the farmers are unwilling to sell the surplus milk to the government for the price that government agencies set, then it should have no effect on the price of milk you can buy in the supermarket (unless we assume oligopsony drives the prices down, which I think most economists disagree with). If, however, they do agree on that, the price of milk in the supermarket goes up.
Artificially increasing the demand for some product via demand-side subsidies drives the prices up.
If a milkman makes a mistake of setting the price of his milk too low, the government cannot help him by buying some milk from him. The government can only help in that way if the price of milk is set too high.

I don't see why there would be.

Because it looks like an interesting question: why exactly is soy milk four times as expensive as cow's milk? Though, there appears to be a surprising (near-)complete lack of peer-reviewed research on some other interesting questions as well. Like, what are the ways animals in the wild tend to die. Do most of them die of starvation? Or get eaten? Or do they mostly die of illnesses or accidents? Or why is *kar~kur occurring at the beginning of many Croatian river names (something I am trying to publish a paper about)?

The world is not in preschool like you are.

I am not sure what you mean. I am obviously not in preschool, I am studying at a university. Sure, I am studying computer engineering, which is not closely related to economics. I have published some papers about linguistics, which is slightly more related to economics, though.

Is there research in peer reviewed journals about how two apples plus two apples equals four apples?

That's not remotely similar. First of all, if you know how to count, you can easily check for yourself that 2+2=4. You cannot do anything similar with economics.

You can look up the commodity prices of soybeans.

What's that supposed to tell me? Nothing without the knowledge how many soybeans (and wheat, and sunflower oil, and other stuff that goes into it) it takes to produce 1 liter of soy milk, which is not easy to find.

obviously you must be right

I am not sure I am right, but I am relatively certain you are wrong here. One does not need to know the right answer to recognize a wrong one.

I have not provided enough "sources"

Making wild empirical claims without references is not science. And proclaiming them to be "obvious" does not make it scientific either.

something stupidly obvious

Well, it is certainly less obvious than that the Earth is flat.

[brimstoneSalad]

Milk is not a monopoly, they have competition and price fixing is illegal.

How is that relevant? Artificially increasing the demand for some product drives the price up, whether or not there is a competition.

It doesn't increase demand, it buys up surplus that the market doesn't want.
You don't understand how any of this works Teo, just stop.

Government prices are determined by agencies, not just any price the farmers want

If the farmers are unwilling to sell the surplus milk to the government for the price that government agencies set,

That would be very stupid of the farmers, because even a penny a gallon is better than $0.00 a gallon and having to pay to dispose of spoiled milk.

That's like saying you're unwilling to sell your garbage for $0. Nobody is going to pay you for your garbage, you were LUCKY to have somebody take it for free. Well, congratulations, now you're buried in garbage.

If a milkman makes a mistake of setting the price of his milk too low, the government cannot help him by buying some milk from him. The government can only help in that way if the price of milk is set too high.

I already explained this Teo. If milk were a monopoly it might drive prices up, but that's not the case. It's help that's not profitable, unlike the market, it only cuts losses. Farmers have to set their prices based on the market, the government only insures them for free against losses.

I don't see why there would be.

Because it looks like an interesting question:

It may look like an interesting question to very stupid people who know nothing about economics or the industry. To everybody else it's a dumb question which should be overwhelmingly obvious and would make a very stupid study that I don't think anybody would publish.

I'm sure it's a good project for a preschool economics class. Don't forget the crayons and glitter.

I have published some papers about linguistics, which is slightly more related to economics, though.

Incorrect. I explained this in the other thread.

Is there research in peer reviewed journals about how two apples plus two apples equals four apples?

That's not remotely similar.

No, how to count apples is a much more difficult and interesting question.
I should have used a simpler comparison. Is there research in a peer reviewed journal on mathematics about how 1 = 1?
No, that's still too complicated.
Is there research in a peer reviewed journal on mathematics about how 1?
No, still too complicated and interesting!

Sorry, I'm not stupid enough to come up with a dumber question than the one you think there should be peer reviewed research on.

What's that supposed to tell me? Nothing without the knowledge how many soybeans (and wheat, and sunflower oil, and other stuff that goes into it) it takes to produce 1 liter of soy milk, which is not easy to find.

When will you learn Teo? Always assume I am right and that you're missing something VERY obvious.

Wow how do you find the way to make a food? I think it's called a... recipe.

https://bfy.tw/Pte5

From experience it's between a half cup to a cup per liter. At most around a quarter by volume, probably much less from large facilities that have stronger presses and can get more out of the pulp.

If you want to be more precise, nutrition in X soymilk = Y soybeans - Z okara.
Balance it on the basis of fiber (in the okara and soybeans) and protein (in all three). Again, going to be less than that for a large facility with powerful presses.

Anyway, if you know very basic mathematics that should be extremely easy.

I can tell you that it takes fewer than a liter of soybeans to make a liter of soymilk, and even if it took an entire liter of soybeans to make it you should be able to tell that's not a significant contributor to price.

Organic would add several cents to the price. That doesn't account for a 4x price difference. It's barely a rounding error. I don't really want to do the math for any particular brand to find out if it's a difference between 4 or 8 cents.

obviously you must be right

I am not sure I am right, but I am relatively certain you are wrong here. One does not need to know the right answer to recognize a wrong one.

I have not provided enough "sources"

Making wild empirical claims without references is not science. And proclaiming them to be "obvious" does not make it scientific either.

Well, it is certainly less obvious than that the Earth is flat.

No, you're just very stupid. Aggressively so.

[teo123]

@brimstoneSalad, this conversation is not going anywhere. You obviously either don't have a point or are extremely bad at communicating it. In fact, it seems to me all you have here is ridicule.

Milton Friedman, a Nobel-prize-winning economist, clearly believes agricultural subsidies significantly increase the price: https://youtu.be/lSdZXYk3zKI?t=45
He said that many people will appreciate both lower taxes and lower food bills if the subsidies were ended, clearly implying those subsidies increase the prices. I am not sure I am buying into what he has to say, but it makes a lot more sense than your word salads about how subsidies decrease the price of milk.

[thebestofenergy]

@brimstoneSalad, this conversation is not going anywhere. You obviously either don't have a point or are extremely bad at communicating it. In fact, it seems to me all you have here is ridicule.

I'm talking to you as someone who has had very little conversation with you, and has just skimmed through your posts.

I am AMAZED you're not banned yet. You're arrogantly condescending in your ignorance, and you refuse to learn once things get explained to you.
Instead, you try and find any kind of thought process that supports your side, at all costs - even going as far as supporting conspiracy theories.

I don't understand how you're still allowed to be on this forum after breaking the forum rules so many times. In every other community, members that would be so uncaringly ignorant and arrogant, and dismissive of others' arguments when it's convenient for them, would have been banned years ago already. Do you realize that?

I'm not exactly sure why you're not banned in this forum, but it almost seems like you're trying to get banned from it - and if not trying to, you seem to think that it can't happen to you.

Maybe you need to reminded that this is the only place where you could work through some of your conspiracy theories, and have lengthy discussions to be able to clear your mind about things that others would have simply ridiculed you for believing.
Do you really think somewhere else people would have engaged with your conspiracy theories to such an extent as they did here?

I don't think you're really seeing the patience and the care that is being given to you.
I'm going to say this not to attack you for no reason, but to hopefully make you understand why this forum should be valuable to you: I do not respond to your posts because I think it's a waste of time, and I choose to let you be in your chaotic mess of a confused mind rather than help you, because I'm not sure you're even able to change your attitude and the way you work things out without professional help.
But there are others, instead, that do try to help you, and are charitable towards you giving their time to try and help you out - something that is altruistic towards you, it doesn't give them any benefit.

And yet, you seem to either not be willing to listen, or spit in the face of anyone wanting to and giving their time and effort to help you.

I'm honestly not sure why you're acting this way, if you want to get banned or don't want answers to your questions/problems anymore, just say so.
But you seem awfully grateful to have been able to sort out certain doubts/issues you were having, while at the same time constantly behaving as if everyone else but you here is arguing for the sake of it.

I'm going to second what @brimstoneSalad prompted you to do, to seek professional help.
I'm not saying this to be spiteful, but because I sincerely believe you'll be better off with it. You do show signs of serious mental issues, and it must be quite a torment for you to be able to work through certain things. I can only imagine what it's like to believe that everybody is a liar, and pushing people away because of it, or that your beliefs don't seem to match reality but you can't let go of them. It must be hell at times.

But maybe trying, with an open mind, to try and go to a psychiatrist with a good record... What do you lose? You can always choose to stop if you want to.

Or else, do you really want to live the rest of your life as a conspiracy theorist, with issues of letting go of crazy beliefs and pushing others away? Think about how you want your future to look like: as a conspiracy theorist that doesn't want to let go of crazy beliefs and not being able to hold down serious relationships because of that, or even have peace of mind?
Ask what your old self would want you to do right now. Going to a psychiatrist is worth the try.