An egg can support a large amount of weight. Its strength comes from its dome shape. Some research has shown that chicken eggs can handle as much as 17 pounds on the end. This amazingly strong shell brings protection to the valuable contents inside. This strong egg is fragile. And once broken, it is complete and irreversible destruction. We are all familiar with the nursery rhyme Humpty Dumpty Sat on a Wall. Humpty Dumpty sat on a wall, Humpty Dumpty had a great fall; Threescore men and threescore more, Could not place Humpty as he was before. It never says anything about an egg. According to some etymologists, the term comes from a French nursery rhyme and was a diminutive form of the name Humphrey. The term is reported in 1785 as describing a “short, dump, hump-shouldered person” according to Online Etymology Dictionary.
According to some, Humpty Dumpty celebrates an important victory of the Parliamentary Army over the Royalists in the Second English Civil War in 1649. The Royalists had secured the walled and ancient town of Colchester. Among its weapons was a cannon located on the church. When the underlying structure was destroyed in cannon fire, it crashed and broke. The cannon’s name was Humpty Dumpty. When the royalists (the king’s men) could not put it together or remount it, the town surrendered and the siege ended. Thus the more common ending to the poem:
And all the King’s horses and all the King’s men
Couldn’t put Humpty together again.
(A site explaining the darker side of this and other nursery rhymes can be found at Nursery Rhymes – Lyrics, Origins & History! , http://www.rhymes.org.uk/. ) Today the poem has come to symbolize the ultimate impotence of mankind or even government to fix the irreparable.
Humpty Dumpty’s association with the egg comes from Lewis Carroll’s Alice Through the Looking Glass . Alice encounters him in Chapter 6 and notes how he resembles an egg and the original illustrations depict him as an egg with skinny limbs. After Alice recites yet another variation of the rhyme, she suggests he would be safer on the ground. Humpty Dumpty responds, “‘If I did fall,’ he went on, ‘the King has promised me – ah, you may turn pale, if you like! You didn’t think I was going to say that, did you? The King has promised me – with his very own mouth – to – to –’”
Then there is the tale of the poor woman from Winchester who was carrying her eggs to market when some hoodlums maliciously broke them. Along came a priest, later canonized as Saint Swithun, who miraculously restored the eggs. From absolute destruction to wholeness, this is a miraculous story of redemption. But it is not an act of the king’s men, but the work of the Divine.
An egg shell-like structure surrounds producers to protect them from some of the more devastating characteristics of marketing. The combination of cooperatives and marketing orders and the nature of milk itself brings order through a solid framework and that order brings prices that lots of individual pieces would never bring. But it is fragile, and it is threatened.
Ongoing antitrust litigation in the Southeast, Northeast and Midwest is challenging those structures. In class action lawsuits, some producers are challenging the existing marketing structure under the antitrust laws against bottlers, cooperatives and individuals. The claims are that these individuals and corporations colluded to restrict the market opportunity for producers and, as a consequence, caused the producers losses. Although just a few producers have brought the suit, they claim that they represent all of the producers in the Southeast and that all producers in the Southeast have been harmed.
Recently a federal court in Greeneville, Tennessee, has agreed that the named plaintiffs can represent other producers similarly situated in a class action. What this means is that the case can now proceed to the issue of liability. The next step in the litigation is a phase called summary judgment or asking the judge to make decisions based upon the law where there is no dispute on underlying facts. Any remaining actions after those motions will be tried.
What happens in the Southeast in this case, as well as the cases in the Midwest and the Northeast, will affect dairymen throughout the nation, even if they are not part of the “class” certified in the cases. There is no market in the Southeast that is distinct from markets in the rest of the country. Rather, the Southeast represents a region wherein the national market for milk operates along with all the other regions. As part of one national market, the marketing structure evident in the Southeast is part and parcel of the structure dairy producers rely upon for orderly markets throughout the entire country. Like breaking a part of an egg, it breaks the whole egg.
In the action against the cooperatives and some of their leaders, the plaintiffs allege that the working together of producers and cooperatives violates the antitrust laws because those cooperatives denied some producers from marketing their milk as they wanted to.
To have enough milk all of the time, there must be too much milk some of the time. This is because cows produce milk in volumes that change season to season and consumers consume milk in volumes that also change season to season, but in the opposite direction. Thus the highest demand comes when milk is the shortest. To have enough for that period, there necessarily will be a surplus later.
This surplus comes at a cost. Generally the surplus is worth less than the milk that is sold to the fluid market. Assembling and hauling the needed milk costs money. The fight in milk marketing is who pays for surplus milk and costs of balancing. In a disorganized and inefficient market, producers pay for it. By organizing into cooperatives and cooperatives into marketing agencies, not only can these costs be shared, but they can be substantially reduced. Further, these costs can be passed on to the buyers of milk, further enhancing producer income.
The dairy industry has through its policies, programs and promotion, commoditized milk to the point that milk is milk is milk. There is no room to effectively differentiate between milk of one quality versus another or one locality versus another or from one breed from another. The only real basis of discrimination is price. Price drives everything. It starts with the consumer and moves backwards. Reduced or no profits demand lower costs. Lower costs come from greater efficiency. Greater efficiency benefits from larger scale. Higher and higher taxes in more forms demand more profits, which means larger scale and so on and so forth. In addition to those forces, the Southeast over the last 30 years experienced a combination of a rapidly growing population and shrinking local milk supply. The egg that was the dairy marketing structure in the region was broke. It could not be put back together again. A new egg was needed.
To reduce the costs of moving milk from the farm to the table, efficiencies had to be increased. To increase efficiencies, producers have to work together. To really and meaningfully increase efficiencies, all producers must be involved. The most expensive and critical of these was balancing the market. In the old days, some of the producers through their cooperatives carried this cost alone. Other producers sold milk directly to plants, and they did not share in that cost but got paid as if they did. Plants could pay the independent producers more money because the plants avoided the cost of balancing. Not only did this shift the cost of balancing to the co-ops, it reduced the income to cover the costs and the plants used the independent milk producer contracts as leverage to lower everyone’s milk price. In the play of independent producer against cooperative producer, the overall level of milk pricing in the market was lower.
In a desire to return more money to their producers, the cooperatives came together to create efficiencies in the balancing. With cooperatives working together, the plants had to bear the true cost of balancing. No longer could they pay producers who did not cover balancing costs the price that was intended to cover it. The cooperatives provided access to the producers, thus it turned out. As in all such changes, it did not happen without some pain and adjustments, but once it was all settled out, and it took years, all producers gained from the higher value in the market. A new, solid, egg was created.
There are those producers who still want the old egg – the one shattered by massive economic forces years ago. They want to go back to the days when it appeared that they were receiving more money because their price was higher than those who were carrying the cost of balancing the market. They have asked the court to put that egg back together again.
Producers pay the cost of this fight for egg reconstruction. Producers in the Southeast are paying lawyers millions and millions of dollars from the sale of milk to defend these cases. If plaintiffs win, then producers will lose even more.
There is no question that things can be made better. Dairymen, processors, consumers and regulators have been involved in a decades-long discussion and process to make the marketing of milk better for all stakeholders. It is the combination of hundreds of meetings and thousands of interactions in formal hearings and informal chat rooms. Actions are taken through contract, operations, regulations and sometimes legislation. We all have been involved in this debate and well we should. If we need yet another egg, it should be all the stakeholders, not just a few to impose it through judicial decree.
So what is this dairy world that plaintiff producers’ lawyers are trying to create through the courts? According to a press article covering a meeting of producers in New England, one of the plaintiffs’ lawyers promised “dramatic changes” in the Southeast. When asked what those changes would be, he replied, “You don’t have a meaningful opportunity to put Humpty Dumpty back together until you push him off the wall. We want to push him off the wall.”
But we know that outside of Divine intervention, no one, not even a powerful government or branch of it, can put a broken egg back together. PD
All opinions are those of the author alone for which he takes full ownership and responsibility.