The farming industry and, specifically, the production of milk has been experiencing serious turmoil in the U.S. lately. The article by Yaffe-Bellany (2020) seeks to understand what has made the dairy industry so vulnerable and why farmers are exposed to external threats. Due to the increased competition and the high prices set for raw milk, farmers are unable to withstand the rivalry and, therefore, have to forfeit, leaving the market (Yaffe-Bellany, 2020).
At first glance, the situation that farmers are facing is impossible to resolve without introducing artificial barriers for large companies selling raw milk. However, Yaffe-Bellany (2020) argues that the use of mergers may have the milk farming industry in the U.S. without hampering the development of the organizations selling raw milk.
A farming co-op that can be created with the help of a merger will need to comply with the standards of the Dairy Farmers of America. The latter was expected to support the rights and needs of American farmers, yet, as time passed and larger organizations emerged, increasing competition, the Dairy Farmers of America lost its impact on the economic status of farmers. Consequently, the development of a co-op will help to consolidate the community of farmers and build the comparative advantage that larger corporations will not be able to trump. The proposed change is believed to start the gradual development of progress within the milk farming sector of the dairy industry.
Viewing the change from the standpoint of the price elasticity of demand will show that, with greater comparative advantage and more flexible prices, farmers will be able to stretch the Viewing the problem from the standpoint of the price elasticity of demand for dairy products. For this reason, the acquisition of Dairy Foods and the consideration of a merger across the farming community should be explored as a possible future opportunity (Yaffe-Bellany, 2020). Thus, the interests and needs of farmers will be addressed correspondingly.
References
Yaffe-Bellany, D. (2020). A Giant Milk Industry Merger Moves Closer With a $425 Million Deal. New York Times. Web.