New England states' Child and Adult Care Food Program and the Nutrition Program for the Elderly have had to absorb nearly one-half million dollars in higher milk prices since the Compact went into effect. If Congress approves the proposed compact legislation, those who depend most upon milk as a low-cost, accessible nutritious food will continue to feel the impact. Among our customers, milk is the number 2 beverage choice, with soda pop leading the way. We sell a lot of soda, but I would readily concede it is not a nutritional food. The relationship between retail prices and customer purchases is seen in our own experience.
Milk is an elastic commodity.
When milk prices increase, sales decline. For example, in January through March of 1999, we experienced record high raw milk costs. Local Dairy Farmers Still Leaving the Farm A goal of the Northeast Dairy Compact was to prevent the loss of local dairy farms. If regional dairy cartels are created around the country, milk prices are very likely to increase. Excess supply will result, which will ultimately hurt the dairy farmer the Compacts are purporting to help.