In a 2012 contest run by the British Columbia Dairy Association, participants submitted songs for cows. Knowing that music calms cows, and calm cows make more milk, the Association sought the most productive song.
First five songs were selected. Then the cows listened and had their milk measured. This song, “A Moo Down Milk Lane” won:
In addition to music, some deep sand, a nice warm temperature, the best alfalfa, better breeding and robotic milkers optimize milk output.
As a result, cow productivity is up:
In Vermont for example, between 1975 and 2012, there were 30% fewer cows producing 30% more milk. Then, when Vermont dairy farmers started buying robot milkers, they further increased individual output by 8% to 10%.
Usually productivity is good. But not now.
During the past 8 months, 43 millions gallons of milk–enough to fill 66 Olympic-sized swimming pools– never made it to market. Dumped in manure lagoons, thrown out, mixed with animal feed, discarded wherever the terrain permitted, excess milk is being destroyed:
Meanwhile, at McDonald’s, Domino’s and Taco Bell, there are more “milk heavy” menu items. Egg sandwiches have butter instead of liquid margarine, the pizzas are cheesier, and the buns are more buttery.
Our Bottom Line: Supply and Demand
As economists, we can explain the ups and downs of milk markets. A classic supply and demand story, it starts with record high milk prices in 2014 when exports increased. As a result, the demand curve shifted to the right and quantity supplied and price were both up:
Then, seeing those high prices, the supply side responded with happier cows and robotic milkers. Shifting to the right, supply increased. Meanwhile though, there was more competition in world markets. With supply up and demand down, we had lower prices and a milk glut.
The orange lines show the new equilibrium:
Now, it all might reverse as price has again started ascending:
My sources and more: Always good for quirky facts, Quartz had the cows graph and was the first of a series of milk articles that I discovered. Displaying the intersection of economic graphs and reality, the Burlington Free Press, here and here, the Washington Post, WSJ, and The Modern Farmer each told a part of the story.