Creation and Distribution of Economic Rents by Regulation: Development and Evolution of Milk Marketing Orders in California

Agricultural History

Volumn 74, Issue 2, 2000, Pages 198-210

  Sumner, Daniel A ^a,b   Wilson, Norbert L W ^c  

^a UNIVERSITY OF CALIFORNIA   (United States)

^b UNIVERSITY OF CALIFORNIA   (United States)

^c AUBURN UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0345998741     PISSN: 00021482     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (29)

1. William J. Kuhrt, coordinating author, "The Story of California's Milk Stabilization Laws: From Chaos to Stability in the California Milk Industry," California Department of Agriculture, Bulletin No. 54, 1965, 179; James M. Tinley, Public Regulation of Milk Marketing in California (Berkeley: University of California Press, 1938), 35.
2. William J. Kuhrt, coordinating author, "The Story of California's Milk Stabilization Laws: From Chaos to Stability in the California Milk Industry," California Department of Agriculture, Bulletin No. 54, 1965, 179; James M. Tinley, Public Regulation of Milk Marketing in California (Berkeley: University of California Press, 1938), 35.
3. The Agricultural Adjustment Act of 1933, U.S. Statutes at Large 48 (1934): 34.
4. Tinley, Public Regulation of Milk Marketing in California, 34. Edwin G. Nourse, Marketing Agreements: Under the AAA (Richmond: The William Byrd Press Inc., 1935), 196-216. Alden C. Manchester, The Public Role in Dairy Economy: Why and How Governments Intervene in the Milk Business (Boulder: Westview Press Inc., 1983), 137-141. The secretary accepted and made effective three California marketing agreements: 1) on 7 November 1933 for Alameda County (Oakland); 2) on 22 November 1933 for Los Angeles; and 3) on 15 December 1933 for San Diego.
5. Tinley, Public Regulation of Milk Marketing in California, 34. Edwin G. Nourse, Marketing Agreements: Under the AAA (Richmond: The William Byrd Press Inc., 1935), 196-216. Alden C. Manchester, The Public Role in Dairy Economy: Why and How Governments Intervene in the Milk Business (Boulder: Westview Press Inc., 1983), 137-141. The secretary accepted and made effective three California marketing agreements: 1) on 7 November 1933 for Alameda County (Oakland); 2) on 22 November 1933 for Los Angeles; and 3) on 15 December 1933 for San Diego.
6. Tinley, Public Regulation of Milk Marketing in California, 34. Edwin G. Nourse, Marketing Agreements: Under the AAA (Richmond: The William Byrd Press Inc., 1935), 196-216. Alden C. Manchester, The Public Role in Dairy Economy: Why and How Governments Intervene in the Milk Business (Boulder: Westview Press Inc., 1983), 137-141. The secretary accepted and made effective three California marketing agreements: 1) on 7 November 1933 for Alameda County (Oakland); 2) on 22 November 1933 for Los Angeles; and 3) on 15 December 1933 for San Diego.
7. To understand the constitutional violation, listing a few facts about milk marketing in the 1930s is helpful. Market milk supplied the fluid milk and cream (or Class 1) markets, which tended to be local, and manufacturing milk supplied cheese, butter, powder, and other product markets, which tended to be national. The marketing agreements of the Agricultural Adjustment Act only regulated milk from farms that produced milk that met the higher sanitation standards required for market milk (Grade A). According to the Ninth Circuit Court of Appeals, the trade of market milk in California was intrastate commerce, and the U.S. Secretary of Agriculture did not have the power to intervene in intrastate markets. For example, Kuhrt, "Story of California's Milk Stabilization Laws," 189, reported the state penalized a large chain store for violating the Los Angles marketing agreement. The store obtained a temporary restraining order against the state. See also Hill v. Darger, 8 S. F. Supp. 189 (9th Cir 1934); Darger v. Hill 76 F. 2d 198 (9th Cir. 1935); and Berdie v. Kurtz 75 F. 2d 898 (9th Cir. 1935).
8. Tinley, Public Regulation of Milk Marketing in California, 35-39. Kuhrt. "Story of California's Milk Stabilization Laws," 179.
9. Tinley, Public Regulation of Milk Marketing in California, 35-39. Kuhrt. "Story of California's Milk Stabilization Laws," 179.
10. Depending on the period, the California Director headed the California Department of Agriculture (CDA) or the California Department of Food and Agriculture (CDFA). Depending on the period discussed, we use the appropriate name; California Agricultural Code, Chapter 10 Article 2, 736.1.
11. Tinley, Public Regulation of Milk Marketing in California, 67-68.
12. California Agricultural Code, Chapter 19, Article 2, 736.3 (b); Tinley, Public Regulation of Milk Marketing in California, 71.
13. David A. Clarke, Olin D. Forker, and Aaron C. Johnson Jr., "Pricing Milk for Manufacturing Purposes in California," California Agricultural Experiment Station, Bulletin No. 801, June 1964, 7; California Legislature, Assembly Interim Committee on Livestock and Dairies, Final Paper, 1961-62, 18:4 (Sacramento, 1963), 27.
14. David A. Clarke, Olin D. Forker, and Aaron C. Johnson Jr., "Pricing Milk for Manufacturing Purposes in California," California Agricultural Experiment Station, Bulletin No. 801, June 1964, 7; California Legislature, Assembly Interim Committee on Livestock and Dairies, Final Paper, 1961-62, 18:4 (Sacramento, 1963), 27.
15. William J. Kuhrt, Chief Division of Marketing, California State Department of Agriculture, "Some Problems in Fluid Milk Price," statement to the California Legislature, Assembly Interim Committee on Livestock and Dairies, Eureka, 27 August 1956; Sacramento, 29 August 1956; and Fresno, 31 August 1956; all mimeographed and located in Department of Agricultural and Resource Economics Library, University of California, Davis (hereafter cited as AREL), 3-6.
16. W. C. Jacobsen, "California Milk Control [April 1954]" mimeographed, AREL.
17. Kuhrt, "Story of California's Milk Stabilization Laws," 186-188.
18. Kuhrt, "Some Problems in Fluid Milk Price," 4-5.
19. The transition from Grade B to Grade A production was not without costs, but producers did move when the price premium was large enough.
20. Joe Gonsalves, interview by Norbert Wilson, Sacramento, California, 14 January 1998; Kings County dairy producers, interview by Norbert Wilson, Hanford, California, 21 November 1998; Humboldt County dairy producers, interview by Norbert Wilson, Eureka, California, 14 No-vember 1998.
21. Jerome B. Siebert, interview by Norbert Wilson, 12 February 1998; Bob Horton, interview by Norbert Wilson, 18 February 1998; Glen Gleason, interview by Norbert Wilson, 23 February 1998.
22. Humboldt County dairy producers, interview.
23. David A. Clarke, "Problems in California Milk Marketing [April 1967]" mimeographed, AREL, 1-4. Jerome B. Siebert, "Appraisal of the Current Status of the California Dairy Industry Study Sheet No. 2," University of California Cooperative Extension Service, circa January 1967.
24. David A. Clarke, "Problems in California Milk Marketing [April 1967]" mimeographed, AREL, 1-4. Jerome B. Siebert, "Appraisal of the Current Status of the California Dairy Industry Study Sheet No. 2," University of California Cooperative Extension Service, circa January 1967.
25. Gleason, interview.
26. California Legislature, The Gonsalves Act of 1967, 1967 Regular Session. 1967. Chapter 927, Chapter 3, 2399-2410.
27. California Legislature. The Gonsalves Act of 1967, 1967 Regular Session, 1967, Chap. 927, Chap. 3, 2399-2410. Also see Daniel A. Sumner and Christopher A. Wolf, "Quotas without Supply Control: Effects of Dairy Quota Policy in California," American Journal of Agricultural Economics 78 (May 1996): 354-66.
28. California Legislature. The Gonsalves Act of 1967, 1967 Regular Session, 1967, Chap. 927, Chap. 3, 2399-2410. Also see Daniel A. Sumner and Christopher A. Wolf, "Quotas without Supply Control: Effects of Dairy Quota Policy in California," American Journal of Agricultural Economics 78 (May 1996): 354-66.
29. Kings County dairy producers, interview. For further discussion of the finance features of the quota, see Daniel A. Sumner and Norbert L. W. Wilson, "Returns and Risk: The Case of the California Dairy Quota," Department of Agricultural and Resource Economics, University of California, Davis, unpublished, 1999.