Wednesday, November 25, 2009
Agrimark Regional Meeting
Ken Buzzell, Senior Vice President of the Newport office, attended the Agrimark Region 12 regional meeting held at the Applecheek Farm in Hyde Park Vermont. Items of discussion were: why the price of milk fell so low in 2009, Agrimark's Operations and Financial Reports and a presentation on what Cabot was doing to promote its products. Quality awards were presented. Dr. Julie Smith from UVM talked about bio-security.
Tuesday, November 24, 2009
VT Small Business Development Center
Ken Buzzell, Senior Vice President of the Newport office, recently participated in a lender forum at the Center for an Agricultural Economy in Hardwick. The class in business planning was offered by the Vermont Small Business Development Center (VtSBDC) and was held on October 14th. About ten people attended, in addition to staff from VtSBDC and lenders. Sarah Isham from VACC, Sam Buckley from the Vermont Community Loan Fund and Megan Dubois from FSA also participated, in addition to Ken. Each spoke about programs offered by their respective companies or agencies with emphasis on what they were, what type of loans they handled and eligibility. A question and answer session followed.
NE Regional Dairy Challenge
Yankee was well represented recently at the Northeast Regional Dairy Challenge. Loan Officer and Farm Tax Specialist Jean Conklin from our White River Junction branch reports the following:
I served as a judge at the Northeast Regional Dairy Challenge held November 5-7 in Glens Falls, NY. Hosted by SUNY Cobleskill, the Dairy Challenge provided the opportunity for about 120 students from 13 colleges, including 2 in Canada, to visit and evaluate one of 3 host farms in Saratoga County. In teams of 5 they made a presentation to a panel of 5 judges who represented all aspects of the dairy industry. I served as lead judge on a judges team which included Kurt Ruppell from Cargill, Dr. Tim Synder from Renaissance Nutrition, Bob Seglowski, DVM, a vet from southwest Vermont and Glenn Taylor a dairy producer from Cassville, NY. Dr. Charlie Sniffen, a Yankee director, also served as a volunteer judge on another team. The Dairy Challenge is sponsored by the dairy industry. The Farm Credit System, including Yankee Farm Credit, is a big supporter. NH and Vermont were well represented with students from UVM, UNH and VTC attending.
The Northeast Regional Dairy Challenge allows students to prepare for the National Dairy Challenge which will be held in Visalia, California in April 2010. This link is to a local newspaper article which provided coverage of the event. For more information please visit dairychallenge.org.
Jean Conklin also serves on the NAIDC Board of Directors.
I served as a judge at the Northeast Regional Dairy Challenge held November 5-7 in Glens Falls, NY. Hosted by SUNY Cobleskill, the Dairy Challenge provided the opportunity for about 120 students from 13 colleges, including 2 in Canada, to visit and evaluate one of 3 host farms in Saratoga County. In teams of 5 they made a presentation to a panel of 5 judges who represented all aspects of the dairy industry. I served as lead judge on a judges team which included Kurt Ruppell from Cargill, Dr. Tim Synder from Renaissance Nutrition, Bob Seglowski, DVM, a vet from southwest Vermont and Glenn Taylor a dairy producer from Cassville, NY. Dr. Charlie Sniffen, a Yankee director, also served as a volunteer judge on another team. The Dairy Challenge is sponsored by the dairy industry. The Farm Credit System, including Yankee Farm Credit, is a big supporter. NH and Vermont were well represented with students from UVM, UNH and VTC attending.
The Northeast Regional Dairy Challenge allows students to prepare for the National Dairy Challenge which will be held in Visalia, California in April 2010. This link is to a local newspaper article which provided coverage of the event. For more information please visit dairychallenge.org.
Jean Conklin also serves on the NAIDC Board of Directors.
NEK Dairy Farmer Meeting
The next meeting of the NEK Dairy Farmers will be on November 24th from 11am to 2pm at Gladstone's Newmont Farm in Bradford, VT. For more information contact Kelly Langmaid, Yankee Farm Credit, phone 802-334-8050.
On Thursday, December 3rd the Vermont Agency of Agriculture is putting on a meeting titled Batter on Deck, Are You Warming Up? It is a farm business transfer planning meeting. The discussion will be led by Rick Hermonot of First Pioneer Farm Credit. The program will begin with pizza at 12:30, followed by discussion and presentation from 1pm to 3pm. The meeting will be held in the Poulin Grain conference room in Newport. Attendance is free - don't miss this opportunity! Please RSVP by December 1st. For more information or to sign up contact Louise Waterman, VT Agency of Agriculture, phone 802-828-6900.
On Thursday, December 3rd the Vermont Agency of Agriculture is putting on a meeting titled Batter on Deck, Are You Warming Up? It is a farm business transfer planning meeting. The discussion will be led by Rick Hermonot of First Pioneer Farm Credit. The program will begin with pizza at 12:30, followed by discussion and presentation from 1pm to 3pm. The meeting will be held in the Poulin Grain conference room in Newport. Attendance is free - don't miss this opportunity! Please RSVP by December 1st. For more information or to sign up contact Louise Waterman, VT Agency of Agriculture, phone 802-828-6900.
Tuesday, November 10, 2009
Bill Gates on Agriculture
Bill Gates recently gave his first major address on agriculture. He spoke at the World Food Prize Symposium in Iowa last month. The World Food Prize was the vision of Dr. Norman Borlaug.
Bill Gates praised the legacy of Dr. Borlaug and spoke about the need for the next Green Revolution, especially in Africa. He said that agriculture needs to embrace both sustainability and technology, including biotechnology. And he emphasized that "the next Green Revolution must be guided by small-holder farmers." He used the word "small" 21 times in his speech. And he announced grants totaling $120 million to nine institutions around the world from the Bill and Melinda Gates Foundation (press release).
Speaking of Dr. Borlaug, Bill Gates said that "he proved that farming has the power to lift up the lives of the poor."
Click here for more information about the symposium. Here is a link to Bill Gates' speech.
Bill Gates praised the legacy of Dr. Borlaug and spoke about the need for the next Green Revolution, especially in Africa. He said that agriculture needs to embrace both sustainability and technology, including biotechnology. And he emphasized that "the next Green Revolution must be guided by small-holder farmers." He used the word "small" 21 times in his speech. And he announced grants totaling $120 million to nine institutions around the world from the Bill and Melinda Gates Foundation (press release).
Speaking of Dr. Borlaug, Bill Gates said that "he proved that farming has the power to lift up the lives of the poor."
Click here for more information about the symposium. Here is a link to Bill Gates' speech.
Tuesday, November 3, 2009
Director Nominations
It's that time of year again when Yankee's Nominating Committee begins selecting director candidates for the elections in April 2010. There will be three elections, one director seat in each region. Each position is for a three year term. If you would like to be considered for nomination, please contact a member of the Nominating Committee at the numbers below or call your local branch.
Region #1 (Chittenden, Franklin, Grand Isle counties, Vt.; Essex, Clinton counties, N.Y.)
Arnold Mercy 802-326-4200
Wynn Paradee 802-524-4202
Mark Wrisley 518-963-4039
Region #2 (Caledonia, Essex, Lamoille, Orange, Orleans, Washington counties in Vt.; Coos and Grafton counties, N.H.)
Richard Hall 802-229-6342
Richard Martin 802-328-4120
Rendell Tullar 603-353-4860
Region #3 (Addison, Bennington, Rutland, Windham, Windsor counties, Vt.; Cheshire and Sullivan counties, N.H.)
David Ainsworth 802-763-8017
Paul Audy 802-388-2348
Bruce Bascom 603-835-6361
If you have any questions about the purpose or the procedures of the Nominating Committee, please contact John Peters, VP Operations at 800-639-3053.
Region #1 (Chittenden, Franklin, Grand Isle counties, Vt.; Essex, Clinton counties, N.Y.)
Arnold Mercy 802-326-4200
Wynn Paradee 802-524-4202
Mark Wrisley 518-963-4039
Region #2 (Caledonia, Essex, Lamoille, Orange, Orleans, Washington counties in Vt.; Coos and Grafton counties, N.H.)
Richard Hall 802-229-6342
Richard Martin 802-328-4120
Rendell Tullar 603-353-4860
Region #3 (Addison, Bennington, Rutland, Windham, Windsor counties, Vt.; Cheshire and Sullivan counties, N.H.)
David Ainsworth 802-763-8017
Paul Audy 802-388-2348
Bruce Bascom 603-835-6361
If you have any questions about the purpose or the procedures of the Nominating Committee, please contact John Peters, VP Operations at 800-639-3053.
Sunday, September 20, 2009
Risk models - more information
In the previous two posts (here and here) I wrote about mathematical risk models and how they contributed to the financial crisis of 2008. This post contains references to more information.
I recommend the following three books, all written before last year's financial crisis:
Against the Gods: The Remarkable Story of Risk, by Peter Bernstein (1996). This is a very readable history of the mathematics of risk. It is surprising how much of this history is from the study of gambling. This book is the source of the graph of monthly changes in the S&P 500 stock index in this post. The illustration on the cover of the book is Rembrandt’s painting of “The Storm on the Sea of Galilee.” Now there’s an example of risk!
The Black Swan: The Impact of the Highly Improbable, by Nassim Nicholas Taleb (2007). Dr. Taleb was a practitioner of mathematical finance, and gives an inside view of the profession. This book was a New York Times bestseller. Dr. Taleb calls the normal distribution the "GIF": the Great Intellectual Fraud (chapter 15).
Dr. Taleb dedicated The Black Swan to the author of the third book that I recommend: "To Benoit Mandelbrot, a Greek among Romans."
The (mis)Behavior of Markets: A Fractal View of Financial Turbulence, by Benoit Mandelbrot and Richard Hudson (2004). Benoit Mandelbrot is a famous mathematician, known for his work with fractals and the Mandelbrot set. He was not originally known for his work with the mathematics of risk. In a twist of fate that we in Farm Credit can appreciate, Dr. Mandelbrot became interested in the mathematics of risk when studying the volatility of cotton prices. He tells that story in Chapter VIII "The Mystery of Cotton."
Dr. Mandelbrot writes that there is a spectrum of risk, from "mild" to "wild." He says that the normal distribution is sufficient for analyzing mild risk, but that there is no mathematics currently available that is adequate for analyzing wild risk. If a mathematical tool is ever to be developed that will help us analyze wild risk, Dr. Mandelbrot believes that it will be found in fractal mathematics.
Of the three books, The (mis)Behavior of Markets is the most insightful. But The Black Swan has the most delightful quote—on p. 225 Dr. Taleb says: "Likewise, the government-sponsored enterprise Fanny Mae [sic], when I look at their risks, seems to be sitting on a barrel of dynamite, vulnerable to the slightest hiccup. But not to worry: their large staff of scientists deemed these events 'unlikely.' " Dr. Taleb wrote that in 2007. Here's what happened in 2008.
I also recommend the following newspaper and magazine articles, all published during and after the financial crisis:
“The 1% Panic,” by L. Gordon Crovitz, Wall Street Journal, 10/13/08 (may require subscription to read). Discusses two of the three books mentioned above.
“The End,” by Michael Lewis, portfolio.com, 11/11/08. No math, but an interesting discussion of people.
“Risk Mismanagement,” by Joe Nocera, New York Times, 1/4/09. Discusses one of the three books mentioned above.
“Recipe for Disaster: The Formula That Killed Wall Street,” by Felix Salmon, Wired Magazine, 2/23/09. Discusses more esoteric math than I have written about on this blog.
If you wish to play around with the normal distribution, there is an excellent Excel file that you can download here. I used this file to generate the graph of the normal distribution in this post.
I recommend the following three books, all written before last year's financial crisis:
Against the Gods: The Remarkable Story of Risk, by Peter Bernstein (1996). This is a very readable history of the mathematics of risk. It is surprising how much of this history is from the study of gambling. This book is the source of the graph of monthly changes in the S&P 500 stock index in this post. The illustration on the cover of the book is Rembrandt’s painting of “The Storm on the Sea of Galilee.” Now there’s an example of risk!
The Black Swan: The Impact of the Highly Improbable, by Nassim Nicholas Taleb (2007). Dr. Taleb was a practitioner of mathematical finance, and gives an inside view of the profession. This book was a New York Times bestseller. Dr. Taleb calls the normal distribution the "GIF": the Great Intellectual Fraud (chapter 15).Dr. Taleb dedicated The Black Swan to the author of the third book that I recommend: "To Benoit Mandelbrot, a Greek among Romans."
The (mis)Behavior of Markets: A Fractal View of Financial Turbulence, by Benoit Mandelbrot and Richard Hudson (2004). Benoit Mandelbrot is a famous mathematician, known for his work with fractals and the Mandelbrot set. He was not originally known for his work with the mathematics of risk. In a twist of fate that we in Farm Credit can appreciate, Dr. Mandelbrot became interested in the mathematics of risk when studying the volatility of cotton prices. He tells that story in Chapter VIII "The Mystery of Cotton." Dr. Mandelbrot writes that there is a spectrum of risk, from "mild" to "wild." He says that the normal distribution is sufficient for analyzing mild risk, but that there is no mathematics currently available that is adequate for analyzing wild risk. If a mathematical tool is ever to be developed that will help us analyze wild risk, Dr. Mandelbrot believes that it will be found in fractal mathematics.
Of the three books, The (mis)Behavior of Markets is the most insightful. But The Black Swan has the most delightful quote—on p. 225 Dr. Taleb says: "Likewise, the government-sponsored enterprise Fanny Mae [sic], when I look at their risks, seems to be sitting on a barrel of dynamite, vulnerable to the slightest hiccup. But not to worry: their large staff of scientists deemed these events 'unlikely.' " Dr. Taleb wrote that in 2007. Here's what happened in 2008.
I also recommend the following newspaper and magazine articles, all published during and after the financial crisis:
“The 1% Panic,” by L. Gordon Crovitz, Wall Street Journal, 10/13/08 (may require subscription to read). Discusses two of the three books mentioned above.
“The End,” by Michael Lewis, portfolio.com, 11/11/08. No math, but an interesting discussion of people.
“Risk Mismanagement,” by Joe Nocera, New York Times, 1/4/09. Discusses one of the three books mentioned above.
“Recipe for Disaster: The Formula That Killed Wall Street,” by Felix Salmon, Wired Magazine, 2/23/09. Discusses more esoteric math than I have written about on this blog.
If you wish to play around with the normal distribution, there is an excellent Excel file that you can download here. I used this file to generate the graph of the normal distribution in this post.
Risk models - some math
In the previous post I wrote about how the failure of mathematical risk models contributed to the financial crisis of 2008. That post did not include any math. This post is about some of the math.
Modern financial theory purports to be able to calculate probabilities associated with risk with a high degree of precision. There is much more to modern financial theory than I understand, but it is primarily built on the foundation of the normal distribution, also called the bell curve:
The normal distribution is a wonderful piece of mathematics. If you know only two numbers — the mean and the standard deviation — you can calculate all kinds of probabilities with precision.
You may have encountered the normal distribution in high school or college. Even if you didn't study it formally, you may have heard about grading tests "on a curve." This is the curve! The normal distribution describes many phenomena in our world, including the distribution of test scores. For example, the Scholastic Aptitude Test (SAT) is graded according to the normal distribution. Scores on the SAT are calibrated to have a mean of 500 and a standard deviation of 100. There is only a 2.3% probability of scoring 700 or higher (two standard deviations above the mean). That is the kind of calculation that is possible with the normal distribution.
The basic insight of modern financial theory is that changes in the price of an asset (i.e., the volatility of that price) can be modeled using the normal distribution. There will be many small changes clustered around the mean. There will be fewer large changes, far from the mean.
This works a lot of the time. The problem is that it doesn't work all the time. Below is an example of when it doesn't work. This graph shows monthly changes in the S&P 500 stock index (source p. 147):
The changes far from the mean (what are called the "tails" of the distribution) do NOT decrease to virtually nothing as in the normal distribution; they actually increase! A mathematical risk model based on the normal distribution will significantly underestimate the amount of risk in the world, especially in times of high volatility—i.e., in the tails.
So why do financial institutions use mathematical risk models that are ultimately based on the normal distribution? Two reasons. First, it does work well a lot of the time. And second, we don't have any better tools in our mathematical toolbox. There simply isn't any mathematics available that adequately describes risk in times of high volatility, like last fall.
For a list of references with more information, see this post.
Modern financial theory purports to be able to calculate probabilities associated with risk with a high degree of precision. There is much more to modern financial theory than I understand, but it is primarily built on the foundation of the normal distribution, also called the bell curve:
The normal distribution is a wonderful piece of mathematics. If you know only two numbers — the mean and the standard deviation — you can calculate all kinds of probabilities with precision.You may have encountered the normal distribution in high school or college. Even if you didn't study it formally, you may have heard about grading tests "on a curve." This is the curve! The normal distribution describes many phenomena in our world, including the distribution of test scores. For example, the Scholastic Aptitude Test (SAT) is graded according to the normal distribution. Scores on the SAT are calibrated to have a mean of 500 and a standard deviation of 100. There is only a 2.3% probability of scoring 700 or higher (two standard deviations above the mean). That is the kind of calculation that is possible with the normal distribution.
The basic insight of modern financial theory is that changes in the price of an asset (i.e., the volatility of that price) can be modeled using the normal distribution. There will be many small changes clustered around the mean. There will be fewer large changes, far from the mean.
This works a lot of the time. The problem is that it doesn't work all the time. Below is an example of when it doesn't work. This graph shows monthly changes in the S&P 500 stock index (source p. 147):
The changes far from the mean (what are called the "tails" of the distribution) do NOT decrease to virtually nothing as in the normal distribution; they actually increase! A mathematical risk model based on the normal distribution will significantly underestimate the amount of risk in the world, especially in times of high volatility—i.e., in the tails.So why do financial institutions use mathematical risk models that are ultimately based on the normal distribution? Two reasons. First, it does work well a lot of the time. And second, we don't have any better tools in our mathematical toolbox. There simply isn't any mathematics available that adequately describes risk in times of high volatility, like last fall.
For a list of references with more information, see this post.
What went wrong?
The following column appears in the Fall 2009 issue of Financial Partner magazine:
The Financial Crisis of 2008: What went wrong?
What caused last fall’s financial crisis? What lessons can we learn?
In this column, I discuss one of many contributing factors: The mathematical models that financial institutions used to manage risk were not up to the task. Don’t worry, this column isn’t about mathematics. It’s about the risks of thinking we know more than we actually do.
Some things in our world can be calculated with precision and some cannot. Farmers know this intuitively. We can calculate exactly what time of day and where on the horizon the sun will rise three weeks from next Tuesday. (I use “we” loosely. I mean that someone in our society is capable of such a calculation, and the rest of us can look it up on the Internet.) But we cannot calculate with any certainty at all whether that sunrise will be visible or obscured by a cloud.
Can financial risk be precisely calculated like the motions of heavenly bodies? Or is it as unpredictable as the weather?
A typical way to measure financial risk is in terms of the volatility of the price of something. The “something” can be almost anything that can be owned, such as stocks, bonds, commodities or real estate. Or it can be a derivative financial instrument based on such things as stocks, bonds, commodities or real estate. Trillions of dollars of such assets are traded regularly. One can observe the prices at which they trade and measure changes (or volatility) in those prices.
The next step is to estimate the probabilities of future price changes. There is a high probability of small price changes which represent little risk. Conversely, large price changes represent significant risk but occur infrequently.
We can calculate these probabilities using modern financial theory. (Again, I use “we” loosely.) The mathematics involved is well beyond high school algebra, so Wall Street employed an army of mathematics PhDs.
Even those of us who don’t understand higher mathematics often make investments based on information that incorporates the mathematics of modern financial theory, such as public ratings on bonds and other debt instruments. The result is that investors made trillions of dollars of investment decisions thinking that they understood the risk in their portfolios.
Alas, events proved otherwise. Many investments were far riskier than the mathematical models predicted. Large price movements occurred more frequently than expected and the theory underpredicted the likelihood of extreme events. As a result, several large financial institutions suffered unexpected losses that they couldn’t absorb, resulting in failure. And this cascaded through the financial system, causing more failures.
What are the lessons?
Should we tar and feather the mathematicians? Well, no. Mathematics is useful and successfully explains significant portions of our world. But we got ahead of ourselves in thinking that we fully understood the mathematics of risk. One very costly lesson learned is that we should be more cautious when thinking that we understand our world. Another lesson is that many financial institutions should hold more capital. The financial institutions that failed thought they had sufficient capital based on their mathematical models. Unfortunately, they were wrong.
At June 30, 2009, Yankee’s permanent capital ratio was 18.2 percent. While no amount of capital completely guarantees against all events, you should take comfort that this level is considerably higher than most other financial institutions, both inside and outside the Farm Credit System.
More discussion
The following two posts on this blog are also on this topic:
Risk models - some math
Risk models - more information
The Financial Crisis of 2008: What went wrong?
What caused last fall’s financial crisis? What lessons can we learn?
In this column, I discuss one of many contributing factors: The mathematical models that financial institutions used to manage risk were not up to the task. Don’t worry, this column isn’t about mathematics. It’s about the risks of thinking we know more than we actually do.
Some things in our world can be calculated with precision and some cannot. Farmers know this intuitively. We can calculate exactly what time of day and where on the horizon the sun will rise three weeks from next Tuesday. (I use “we” loosely. I mean that someone in our society is capable of such a calculation, and the rest of us can look it up on the Internet.) But we cannot calculate with any certainty at all whether that sunrise will be visible or obscured by a cloud.
Can financial risk be precisely calculated like the motions of heavenly bodies? Or is it as unpredictable as the weather?
A typical way to measure financial risk is in terms of the volatility of the price of something. The “something” can be almost anything that can be owned, such as stocks, bonds, commodities or real estate. Or it can be a derivative financial instrument based on such things as stocks, bonds, commodities or real estate. Trillions of dollars of such assets are traded regularly. One can observe the prices at which they trade and measure changes (or volatility) in those prices.
The next step is to estimate the probabilities of future price changes. There is a high probability of small price changes which represent little risk. Conversely, large price changes represent significant risk but occur infrequently.
We can calculate these probabilities using modern financial theory. (Again, I use “we” loosely.) The mathematics involved is well beyond high school algebra, so Wall Street employed an army of mathematics PhDs.
Even those of us who don’t understand higher mathematics often make investments based on information that incorporates the mathematics of modern financial theory, such as public ratings on bonds and other debt instruments. The result is that investors made trillions of dollars of investment decisions thinking that they understood the risk in their portfolios.
Alas, events proved otherwise. Many investments were far riskier than the mathematical models predicted. Large price movements occurred more frequently than expected and the theory underpredicted the likelihood of extreme events. As a result, several large financial institutions suffered unexpected losses that they couldn’t absorb, resulting in failure. And this cascaded through the financial system, causing more failures.
What are the lessons?
Should we tar and feather the mathematicians? Well, no. Mathematics is useful and successfully explains significant portions of our world. But we got ahead of ourselves in thinking that we fully understood the mathematics of risk. One very costly lesson learned is that we should be more cautious when thinking that we understand our world. Another lesson is that many financial institutions should hold more capital. The financial institutions that failed thought they had sufficient capital based on their mathematical models. Unfortunately, they were wrong.
At June 30, 2009, Yankee’s permanent capital ratio was 18.2 percent. While no amount of capital completely guarantees against all events, you should take comfort that this level is considerably higher than most other financial institutions, both inside and outside the Farm Credit System.
More discussion
The following two posts on this blog are also on this topic:
Risk models - some math
Risk models - more information
Saturday, September 19, 2009
Senate Judiciary Committee Hearing
Senator Patrick Leahy held a hearing of the Senate Judiciary Committee in St. Albans today: “Crisis on the Farm: The State of Competition and Prospects for Sustainability in the Northeast Dairy Industry.” Senator Bernie Sanders also participated:
Senator Leahy dedicated the hearing to Harold Howrigan.
Much of the testimony concerned Dean Foods. Senator Sanders stated that Dean Foods held 70% of the fluid milk market in New England, and 80% or more in many other states.
The first panel of witnesses included Christine Varney, Assistant Attorney General for Antitrust, and Dr. Joseph Glauber, the Chief Economist for USDA. Ms. Varney said that the Dept. of Justice and the Dept. of Agriculture will be holding a series of joint workshops in 2010 to explore issues relating to competition in agriculture, including the dairy industry. (DOJ news release)
The second panel of witnesses included three Vermont dairy farmers (Bill Rowell, Paul Doton and Travis Forgues) and Bob Wellington, economist for Agri-Mark:
The following graph of dairy farm income and expense was on display at the hearing:
One of the policy issues discussed was the Dairy Price Stabilization Program (aka Growth Management Plan) proposed by Dairy Farmers Working Together, the Milk Producers Council of California and the Holstein Association USA.
The hearing was well attended, with many farmers, politicians and media present. Click here for links to all of the statements and testimony.
UPDATE 9/20/09: Burlington Free Press coverage of the hearing:
Milk processors under fire
Dairy industry antitrust issues not new
photo gallery
Roger Allbee's letter to the editor about the hearing
Anne Galloway's coverage of the hearing on vtdigger.org:
Antitrust division to probe complaints about Dean Foods’ alleged monopolistic practices
(includes YouTube video of some of the testimony)
UPDATE 9/21/09: Wall Street Journal coverage of the hearing (subscription may be required to read):
Top Antitrust Enforcer Supports More Scrutiny of Dairy Industry
Kylie Quesnel is quoted.
Senator Leahy dedicated the hearing to Harold Howrigan.Much of the testimony concerned Dean Foods. Senator Sanders stated that Dean Foods held 70% of the fluid milk market in New England, and 80% or more in many other states.
The first panel of witnesses included Christine Varney, Assistant Attorney General for Antitrust, and Dr. Joseph Glauber, the Chief Economist for USDA. Ms. Varney said that the Dept. of Justice and the Dept. of Agriculture will be holding a series of joint workshops in 2010 to explore issues relating to competition in agriculture, including the dairy industry. (DOJ news release)
The second panel of witnesses included three Vermont dairy farmers (Bill Rowell, Paul Doton and Travis Forgues) and Bob Wellington, economist for Agri-Mark:
The following graph of dairy farm income and expense was on display at the hearing:
One of the policy issues discussed was the Dairy Price Stabilization Program (aka Growth Management Plan) proposed by Dairy Farmers Working Together, the Milk Producers Council of California and the Holstein Association USA.The hearing was well attended, with many farmers, politicians and media present. Click here for links to all of the statements and testimony.
UPDATE 9/20/09: Burlington Free Press coverage of the hearing:
Milk processors under fire
Dairy industry antitrust issues not new
photo gallery
Roger Allbee's letter to the editor about the hearing
Anne Galloway's coverage of the hearing on vtdigger.org:
Antitrust division to probe complaints about Dean Foods’ alleged monopolistic practices
(includes YouTube video of some of the testimony)
UPDATE 9/21/09: Wall Street Journal coverage of the hearing (subscription may be required to read):
Top Antitrust Enforcer Supports More Scrutiny of Dairy Industry
Kylie Quesnel is quoted.
Subscribe to:
Posts (Atom)