OCCUPY FARMERS’ MARKETS

Milk March

When our sale of raw goat’s milk depended on Yuppie couples driving out to our farm fifty miles southwest of Houston the “invisible hand” of desperation slapped me upside the head with my MBA diploma. Granted, I was not an honor, or even a near honor graduate of Case Western Reserve’s Weatherhead school of business but Anala Goat Company’s on-the-farm sales of $200/week versus a $500/week feed bill foretold, a future going-out-of-business sale. Maybe with a catchy tagline e.g. “Had Milk.”

Shelby, the CPA Systems Analyst brains of the outfit, had already poured money, not milk, into building the dairy, buying the goats, dogs, cows, the land and equipment in order to obtain a Grade ‘A’ Raw Dairy License. In addition to rigorous monthly testing of our product, the Texas Department of Health limited sales to on-the-farm only. The delivery of raw dairy to retail stores, farmers’ markets, or even door-to-door was subject to all kinds of bad things like revoking our license.

salt march

Over a double stack order of nachos and fajitas, I asked myself, “what would Gandhi do?” He said, mirror my ‘Salt March to the Sea’ by occupying the Houston Farmers’ Market. I learned at Case Western to look to Harvard Business School case studies for further guidance. Of course, I found zippo raw goat’s milk case studies but Gandhi’s protest of England’s Salt Tax led me to the Boston Tea Party’s, “taxation without representation” caper.

I admit, even as an architect, it was a challenge to connect salt and tea tax revolts to barriers to entry of off the farm sales of raw milk. After all, our neighbors trucked that nasty arugula and okra to the market, waving their ‘organic’ cred banners.

My third data point was the 1920 Prohibition Act.

Prohibition in the United States was a nationwide constitutional ban on the production, importation, transportation and sale of alcoholic beverages that remained in place from 1920 to 1933.

The sale of raw dairy has been Prohibited since 1912 to the present day. California never eliminated raw dairy from retail stores. Texas, Oregon and five other states allow on-the-farm sales only. I joined the Weston Price Foundation, listed analagoatcompany.com on their website www.realmilk.com and setup my 10 x 10 tent on Saturdays at the Houston Farmers’ Market.

WHY PAY THIS GUY $15 FOR A GALLON OF MILK?

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Why pay this guy $15 for a gallon of milk when you can go to Wal-Mart and grab a Great Value jug for just $2.89? Truth is you need his raw – not pasteurized, not homogenized – goat’s milk more than he needs your money.

My Houston Farmers’ Market buddie, Bob Stryk http://texascheese.com/ and I were the two Raw Milk vendors at the market, until a knucklehead board member turned us in to the Texas Department of Health. Even though we were both visited monthly by Vince, the State inspector, our grade “A’ raw dairy license was limited to on-the-farm sales. My farm to market trip was fifty miles up the Southwest freeway. Bob’s sixty head of Jerseys grazed on his 310-acre farm 8 miles past Schulenburg, a 100 miles west out I-10.

BOB STRYKAfter our eviction, I bailed and shortly thereafter moved to China, while Bob relied on ‘drops’ at friendly driveways in Katy and Sugarland. At the market we charged $10/gal. Today, Stryk’s at the farm price was listed at $7.50/gal. That’s fresh raw Jersey cow milk, not pasteurized, not homogenized, pure not-adulterated, 100% digestible nutrient dense butter, cream, yogurt, milk and cheese.

organic pasturesThe raw milk movement (the largest form of  civil disobedience in America) is led by Mark McAfee of Organic Pastures in Fresno, California. Raw milk can be purchased legally on the farm and more importantly in stores. Organic Pastures’s raw milk, butter, kefir, cheddar, cream, and yogurt is available in over 200 stores in the Bay area alone, including Whole Foods. Brace yourselves, the fresh grass-fed 100% organic milk goes for $12.00/gal.     

Why pay the guy at the top $15for a gallon of milk? He’s selling raw goat’s milk the closest thing to mothers’ milk – any species of mammal, save Flipper the  dolphin, can thrive and survive on goat’s milk – but works harder than Stryk and McAfee. Their cows have four teats pumping out 8-10 gallons a day versus two teats and one gallon for the goat.

 

A RETURN TO THE GOAT STANDARD

3Pettis - Breakfast at Trevas for websiteEarly in my goat farming career I bought 6,000+ pounds of goats from a scalper named Floyd Thompson in neighboring Higgins, TX. – At the age of twelve, Will Rogers ran away from his Oklahoma home to Higgins to learn how to be a cowboy. – I agreed to pay 80 cents a pound for Floyd’s 68 rag-tag collection. We drove truck and trailer to the grain silo for an empty weigh-in and returned an hour later for the loaded tally. Wrote a $5,000 check from Shelby’s account and started my two-month saga to resell those puppies for at least 85 cents a pound.

For my first attempt I set-up shop on the highway outside Booker complete with a chain-hook scale. Three hours later $20 bucks for one lousy 20lb. goat sold to a Mexican slaughterhouse worker. Next try was a six pack at the Dodge City livestock auction for a whopping 75 cents a pound. A week later it was the same story at El Reno, the auction west of Oklahoma City, where scalper Floyd had purchased most of the sorry critters weeks before.

Before embarking on another furtive sales venture my goat buddy from up-the-road in Slapout, OK – called Slapout because when the general store was out of stock their response was, “sorry we’re slap out.” – Danny Nord, claimed that slaughter goat buyers wanted ‘wethers’ or neutered ‘billies.’ Taking out his pocket knife he performed the surgery on ten ‘billies’ who post op, laid around the pen with sorrowful facial expressions. Four subsequently failed to survive the experience. Dead goats brought zero cents thereby adding to my cost of goods sold.

mills

It was then suggested that I try selling the remaining stock at the sheep & goat auctions in Texas. Goldthwaite was the closest, seven hours straight south of Follett. Friday afternoon the deed was done, 75 cents for the motley ones and 85 cents for those showing Boer blood influence. When I got home to total all the damage I had sold my collection of hand me down goats for an average of 70 cents on the dollar. Of course the diesel fuel, chicken fried steak and cheeseburger lunches were not included. However, sale barn, livestock auction cuisine beats the truck stop any day.

koreshYou would think that like Adam Smith, the father of Economics who gathered his wisdom of the law of supply and demand at the Glasgow, Scotland sheep auction, I had learned my lesson. But after Shelby and I relocated the Anala Goat Company to Kendleton, TX, 50 miles southwest of Houston I became incentivized by the West African need for $1.25/lb. billy goats. Mrs. Kettler and her husband had over 200 Nubian goats on two acres in Waco, TX. They were a legend in Texas dairy goatdom for selling $7/gal. raw goat’s milk to David Koresh and his Branch Davidians. The ATF put an end to Mrs. Kettler’s number one customer and to top it off Mr. K, who did all the milking by hand, died.

The opportunity to purchase 40 of the best Nubian breeding stock billies for only a dollar a pound, was too much to resist. Borrowing another $5,000 check from Shelby, I loaded those bad boys up in Waco and drove straight back to the Nigerian chop shop in Houston. Woe is me the deal was off, that $1.25/lb. was good for the Christmas rush, and no longer applicable in January especially since Africans don’t celebrate the Super-Bowl.

Dairy goats in general are docile. Does for sure, Bucks not so for sure but Nubian Bucks are the noisiest, rowdiest, most obnoxious breed known to man. Now, Anala Inc. had forty of them in our backyard. Accidents, described as self-punishment in Louise Hay’s book Heal Your Body came to mind when I fed Shelby’s English Mastiff in the barn stall and all forty bad boys rushed in. The Mastiff sunk his two bicuspids into my thigh muttering under his fangs, “that’s for squandered five grand on ill-gotten ventures.”

teeth checkBecause Allah, like God, protects children, drunks and architects, I was spared from complete failure by my Palestinian goat vendor in Katy, who needed two-tooth billies for the Eid al-Fitr festival celebrated by Muslims around the world, marking the end of the holy month of Ramadan. Alhamdulillah, in 2002 Eid was in February. Eid al-Fitr in Arabic literally means “festival of breaking the fast” and back then it meant saving my ass.

After, the Houston Islamic community had opened every Nubian’s mouth to verify that they were two-toothed yearlings they accepted 39 of the four legged devils. One, the prettiest, had a limp and went home with me. Later, swept up in the biblical sense I branded the dappled fawn colored boy buck, Joseph “coat of many colors.” Although, the Palestinian paid me the over a barrel price of $1/lb. I eventually sold Joseph for $500.

josephYou see, Juan Valdez – he looked like a Juan Valdez, only taller – came out to our farm as the Goat Marketing Rep of the Texas Department of Agriculture and inquired about the handsome “coat of many colors” Joseph. “Did you get that buck from Mrs. Kettler?”

Yes, I did.

“That’s great cause she raises the best Nubians in Texas.”

I wondered if the Muslims thought they tasted good too?

At the end of my 400 days and 400 nights of selling goats door to door, I was convinced that a dollar a pound was a good price for any goat as long as it was still alive. Shelby, the CPA Systems Analyst brains of the analagoatcompany.com begged to differ and sent me and Rudy, my polka-dancing Czech-American goat buddy neighbor, off to San Angelo to deliver a dozen or so of our full blood Black Boer goats for $11,000 COD.

ali the turkThe COD part turned out to be a bad check but Rudy and I got to tour the Producers Livestock Auction, where every Tuesday 4,000 goats and 6,000 sheep are auctioned off.  Ali the Turk is the big buyer of sheep and goats in Texas. On Mondays, he’s in Junction, Tuesday he’s front and center in San Angelo, he ends his work week buying for the East Coast ethnic market on Fridays in Goldthwaite. He has his purchased sheep and goats loaded on four level cattle trucks for deliver to New Holland, Pennsylvania.

There are three million goats, six million sheep and 100 million cows in America and 80% of those live in Texas. Save for a couple hundred thousand in Dallas and Houston, the hardcore caprine eaters live in the New York, New Jersey area. Ali either sells direct to a slaughter house or is forced to re-auction them off in New Holland. As Adam Smith and I learned livestock auctions are the  Real World of price discovery.

US dollar Value 3-value-of-the-dollarNo longer in the goat business per se I’m still interested in economics and especially the value of my fixed income dollar. I was on a jet plane to Rio on August 15, 1971 when the flight was grounded in Panama because Nixon closed the ‘Gold Window.’ At the time I thought that was cute. My 1955 Social Studies teacher claimed the dollar was only worth 35 cents, in 1971 it was 25 cents and after Greenspan and Bernanke less than a nickel. I thought the great Satan Greenspan was having an Adam Smith moment when he recently touted the 1913 (when a dollar was a dollar) economy and a return to the gold standard.

I don’t know how much a goat was worth in 1913 or 1971 but in 2001, I know all too well. As of Wed Aug 10, 2016 according to the USDA Market News, an 80lb. wether – A bellwether is literally the lead sheep or goat wether that wears a bell – got $2.22 – $2.42 a pound or almost $200 at the San Angelo, Producers Livestock Auction.

The New Holland Sales Stables in New Holland, Pennsylvania is one of the most important livestock auctions in the country, due to its proximity to the northeast urban population. Twelve percent of all goats slaughtered in the United States will pass through this sale ring at New Holland, and 1.6% of all federally inspected sheep slaughtered in the United States pass through here. For sheep and goats, the New Holland market has national significance due to its proximity to the northeast region of the United States, where the greatest demand for sheep and goat products is located. Although 80% of all sheep are raised in the west and processed by four major packers, the prices set at New Holland are the benchmark that others look at. Because of the high prices at Eastertime, lambs from as far away as New Mexico will arrive in New Holland by the truckload for the Easter lamb sale. Auctions are an important way in which agricultural commodities are marketed; for small farmers, the auction is both a direct outlet for selling their products as well as the measure that sets prices for products sold privately.
The New Holland Sales Stables in New Holland, Pennsylvania is one of the most important livestock auctions in the country, due to its proximity to the northeast urban population. Twelve percent of all goats slaughtered in the United States will pass through this sale ring at New Holland, and 1.6% of all federally inspected sheep slaughtered in the United States pass through here. For sheep and goats, the New Holland market has national significance due to its proximity to the northeast region of the United States, where the greatest demand for sheep and goat products is located. Although 80% of all sheep are raised in the west and processed by four major packers, the prices set at New Holland are the benchmark that others look at. Because of the high prices at Easter time, lambs from as far away as New Mexico will arrive in New Holland by the truckload for the Easter lamb sale. Auctions are an important way in which agricultural commodities are marketed; for small farmers, the auction is both a direct outlet for selling their products as well as the measure that sets prices for products sold privately.

If Ali was forced to sell his goats at the New Holland sale barn in Pennsylvania on Mon Aug 15, 2016 he would receive a whopping $3.15 – $3.25/lb. or $250  for an unsubsidized, brush grazed, ruminant friend of the environment.

sheep goatsA Return to the Goat Standard says that inflation from a dollar a pound in 2001 to $3.00/lb. 15 years later in 2016 is close to 8% per year. Another way, the current price of our 80lb. wether in 2001 dollars is $2.18 the law of supply and demand at work.

Corn was $2.00/bushel for ever until the Ethanol subsidy goosed it up to $7.00/bushel in 2012 with the subsidy curtailed we’re back to $3.70 in 2016, which is still 40 cents a bushel higher than the 2001 price. The big big problem for the corn  producers is their need for $5.37/bushel just to break even.

The cattle price when I was in high school was 20 cents a pound but then a dollar was only worth 35 cents. Cows in Nixon’s 25 cent dollar era went for $0.28/lb. Cattlemen aren’t doing too well these days at $1.32/lb. for the less than a nickel Federal Reserve economy translates to $0.22/lb. in Nixon dollars and $0.15/lb. in my high school years.  Unlike goats, cows like alfalfa, feedlot corn and expensive anti-biotics to stay alive long enough to get to the auction. A mid-west farmer puts the cows and corn fiasco this way:

“Come on you guys just look around. I take a road trip every few years across America. Sometimes I cross the northern part of the country. Sometimes south. A few years (2008-11) ago I saw corn in every 3 cornered 3-acre patch of ground for a thousand miles. This year (Feb 2016) I saw cattle in every 3 cornered 3-acre patch. I no longer raise corn or cattle because I grew weary of mine and your predilection to produce ourselves into bankruptcy. If we could get the government out of agriculture, we would probably be ok. Get rid of all subsidies and I do mean all! Then we can let the market settle itself. Forget ethanol and CRP programs. We really don’t need them. The government does. Maybe the next regime will get out of our way…? Until then I will continue digging ditches.”

A Return to the Goat Standard or the Gold Standard as Greenspan calls it, is the only way to stop the Federal Reserve, Obama, Hillary etal. from taking our currency to infinity and beyond. Here is Nixon’s Gold Window fairy tale.

Gold should be $10,000/oz. to conform to amount of digital money that has been pumped into the world economy. It has been suggested that the US Treasury offer $5,000/oz. for gold to bring Nixon’s temporary solution to an end. If not Ali will be forced to pay $625/lb. for an 80 pound wether in San Angelo, Texas. A $50,000 goat sounds like a fair price to me but then what do I know.

 

FARMERS THE ‘REALITY’ ECONOMISTS

greenspan bbg interview

“If we went back on the gold standard and we adhered to the actual structure of the gold standard as it existed prior to 1913, we’d be fine.  Remember that the period 1870 to 1913 was one of the most aggressive periods economically that we’ve had in the United States, and that was a golden period of the gold standard.  Between 1870 and 1912, a period of forty-two years, industrial production in the United States rose by 682%.

“The only time the American farmer made money was from the end of the Civil War to WWI.”

The United States actually did not return to a gold standard until 1879. However, by 1870, most of the rubble of the Civil War, including the floating “greenback” dollar, had been cleared up. However, the American farmer no longer had to compete with slavery and started receiving ‘hard currency’ for his production.

san angelo 1939Adam Smith, the forefather of all economists including Alan Greenspan, wrote in his 1776 Econ 101 text book, Wealth of Nations, that

“Agriculture, the Produce of the Land, is the SOLE or the PRINCIPAL Source of the Revenue and Wealth of every Country.”

Smith further states the four factors that destroy and degrade “agriculture, the sole source of wealth and revenue of every nation.”

  • Soil Husbandry: “the neglect of cultivation and improvement”
  • Subsidies & Tariffs: “the fall in the real price of any part of the rude produce of land”
  • Farmer Inputs: “the rise in the real price of manufactures”
  • Devalued Dollar: “the declension of the real wealth of the society”

All four tend to “lower the real rent of land, to reduce the real wealth of the landlord, to diminish his power of purchasing either the labor, or the produce of the labor of other people.”

The defrocked Central Banker, Alan Greenspan, whose easy-money policies of the Fed during his 1987-2006 tenure that have been suggested by some to be a leading cause of the subprime mortgage crisis, wants us to go back to the gold standard NOW!