He Sells Milk Cheaper So the Feds Want to Stop Him

The Chicago Tribune reports:

YUMA, Ariz. -- Hein Hettinga is a dairy farmer but he doesn't spend his days milking cows.

Rather, Hettinga keeps a cell phone pressed to his ear to keep tabs on his empire of 15 dairy farms stretching from California to west Texas, including five massive farms in the desert east of Yuma.

But what distinguishes Hettinga from other large-scale dairy farmers is that he also bottles the milk from his Arizona farms and trucks it to stores in Arizona and Southern California. At one of them, Sam's Club in Yuma, two gallons of Hettinga's whole milk sell for $3.99.

That's the same price as a single gallon of whole milk in Chicago, which is second only to New Orleans in the cost of milk.

By controlling all stages of production, Hettinga says he can produce milk so efficiently that he and his customers can make a hefty profit at dirt-cheap prices. Such vertical integration, as it is known, is increasingly popular in agriculture as farmers and processors try to find ways to eliminate costs and increase revenues.

In the highly politicized world of dairy, efficiency could carry a price. Major dairy cooperatives and milk processors successfully persuaded federal regulators to write new rules that would prohibit the business practices that Hettinga has so successfully put in place.

Look who's the enemy of free markets. Why doesn't the federal government like poor people who have to pay artificially high prices for milk? That's the welfare state for you.