US prices are artifially low because the taxpayers (or rather, the holders of American debt) heavily subsidize the agricultural industry:
Quote:
The U.S., however, already uses subsidies under the Dairy Export Incentive Program (DEIP) to move surplus skim milk powder into world markets.1 In addition, surplus skim milk powder is purchased by the U.S. government from the market place under the dairy price support program. Currently the U.S. has the equivalent of a year’s worth of skim milk powder sitting in warehouses, waiting to either be sold back to the commercial markets, or eventually down graded and sold as livestock feed.
http://www.agmrc.org/media/cms/staffpaper349_42EAB16A91E4F.pdfAnother reference:
Quote:
Farm prices for milk in the United States are determined by free-market wholesale prices for cheddar cheese, butter and non-fat dried milk.
These prices are plugged into mathematical formulae, set by federal milk marketing regulations, that calculate the amount dairy farmers are paid for the various components in their milk (butter fat, protein and other solids). There are no quotas for milk production in the United States.
U.S. farmers are also guaranteed a safety net in the form of the Commodity Credit Corporation (CCC) if wholesale prices fall to certain levels. The CCC, a federal agency funded by taxpayers, will offer to buy these products from farmers, essentially becoming the “demander of last resort.”
Such a system means the U.S. dairy market is not entirely free, contrary to what many opposed to Canada’s supply management system say, argues University of Guelph food agriculture professor Rakhal Sarker.
“Most of the time, farmers in the U.S. produce more than the market can absorb, yet they are guaranteed these support prices no matter how much they produce,” Sarker said. “Consumers get to buy at lower prices, but producers get a cheque directly from the government that gives them the difference between the guaranteed price and the sale price. Who pays for this system? The taxpayers.”
http://www.thestar.com/news/insight/article/1089581--is-the-price-of-milk-too-highOther reasons some food staples in the US are cheaper:
- More factory farming: a handfull of large food processing companies have effectively taken over the US farming industry, actually owning the animals on the farm and its products. The farmer is a paid contractor of the company who simply to raises the company's animals for them according to strict instructions provided by the company. A US chicken farmer, for example, now makes on average $30,000 a year. The US meat industry, on its website, defends this by saying chicken farming should no longer be meant as a primary source of income but a secondary source of income. Canadian chicken farmers, in contrast, still enjoy "normal" incomes 2-3 times higher, depending on the scale of operation
-Lax US regulation: US farmers are allowed to pump their animals and produce full of artifical growth hormones, various pharmaceuticals and other chemicals that are not permitted or heavliy restricted by Health Canada. This has become so pervaisve in the US that it has created a demand for a new brand of specialty premium milk: "Hormone Free". In Canada this is not necessary as the sale of artifical Growth Hormone for food animals is still illegal.
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