Over the years, the demand for dairy products has increased around the world and the United States particularly structured an agricultural system that supports large-scale livestock farms in order to fulfill that increase in demand. The agricultural system in the United States is hyperfocused on the production of cash crops not necessarily with the goal in mind that it goes directly to consumers, but rather support a growing business of livestock farms. 

There are many implications to take into consideration when it comes to how we divide up agricultural land from economic standpoints, to environmentally sustainable ones, but when we look at the different priorities, we can adapt more efficient ways to use these resources so that consumers and producers takeaway the best reward, and I believe that starts with breaking down the same system that perpetuates the use of dairy.

To what extent does the domestic dairy industry influence land use in agriculture?

Historically, dairy products have been inelastic, which means that regardless of the consumers purchasing changes, the price of the original product would be consistent. But it’s found that recently due to demographic changes in popularity, the dairy industry has become more elastic, meaning that dairy prices fluctuate. Over time, the elasticity of dairy products has changed from inelastic to elastic allowing for more price fluctuation, and influencing how the government intervenes with dairy production. The government can’t change the cost itself due to the free market, but they have control over how much money they put into dairy production. There is a whole demographic of people that don’t buy dairy products and as a result of dairy becoming elastic, there is more of a chance for influxes of price, leading the government to subsidize dairy companies to keep the prices low. 

• Accessible dairy products to a target market. 

• Lose the potential in international markets.

  • When we subsidize dairy and keep prices low, other countries would have to compete with the low prices with little to no government help, hence the reason we can’t participate in international trade in dairy, exclusively making products domestic regardless of demand. 

The total demand for dairy in the United States is low, but when there's a demographic priority, there is an emphasis on supplying their demand.

With subsidies being the focus on stabilizing the dairy industry, there is the idea that the government should contribute more and even be apart of the distribution of a common resource that supports whole businesses. This used to actually be the system in the United States and was declared “organized capitalism”, where state governments would aid in centralized, community-oriented decision-making for businesses, especially in the dairy industry. Over time, as fear in centralized government emerged post Marxism, the United States adjusted towards “disorganized capitalism”, hence the free market system. In disorganized capitalism, businesses are independent in decision-making, and it was market coordinated rather than by community. So the government is pressured to be able to provide accessible resources to their constituents while also not being able to control the market, which is why subsidies towards industries seems like the most reasonable solution.