The Literal Milk War & the Rise of the DAIRY CARTEL: Raw Cheese and Untold History (PART 1)

The war you've never heard of, fought on American soil over... dairy...

Between the Civil War and WWI, something began happening with farming - that something was causing the prices on farm goods to tumble quickly. In 1865 prices fell to only 25% of what they were the year prior and the industry was horrified. Farmers found many villains to blame including the railroads and the banks. They labeled the railroads a problem because trains were being used to import farm goods. This meant the cheeses which were popular in the Eastern states were now hopping a ride on the rail system and ending up across the United States. Next thing you know, there’s tons of butter, milk and cheese everywhere and dairy became big business, and of course, wherever there is industry, the banks wanted in on the action, so they began financing farming, leading to more farming, therefore more farm products. All of these things combined flooded the market; there was too much product and not enough consumers, therefore prices were falling. To give you an example of how severe this issue was, per capita output of wheat increased from 39 bushels in 1859 to almost 54 bushels in 1879, and with the increased supply, the price dropped like a rock, falling from $2.06 a bushel to only 49-cents.

Now, in the real world of business, the world of business that the vast majority of companies in America live in, the solution is what I call figure it the f*ck out. Being forced to figure it the f*ck out leads to innovation; one company decides they will no longer compete for the lowest price and will instead offer their product faster whereas another offers a more premium product and those that cannot find a way to adapt close their doors forever and the industry will ultimately level itself out. And in the case with the farms of the early 1900s, this happened - but it was the last time in history it would happen…

Come WWI, farmers were relied upon to produce food for the war. Those that remained in business after the huge price decrease experienced incredible wealth, even before America entered the war. This is because the United States government was using tax dollars to finance European purchases of American-made food. In 1915, a year after the war began, net farming income was $4.39 billion, but in 1919, a year after the war ended, it was approaching $10 billion, almost entirely due to artificial stimulation by the US government. An economic historian said, “it would be difficult to find an example in history of so large a class of people rising so rapidly from relative poverty to comparative affluence as did large sections of American farmers in the twenty-five years after 1896”.

But no boom lasts forever, and after the “golden period” of WWI farming, prices began falling again. The farmers, who had now done as they were directed and adapted to being high-output businesses to meet the food demands for the war, didn’t know what to do, so they turned to the same government who made them very wealthy by artificially creating the boom by using tax dollars to fund war food - the same government who told them they must increase output or America will surely fall. The government then thought to themselves, here’s an opportunity for more control!. Enter:

THE AGRICULTURE CARTEL

Pre-1920s, Organized Agriculture, AKA the Agriculture Cartel, was born as a way to protect farms, especially the little farms who most need protecting. Whether it began for this purpose or not, what ended up becoming the plan, in a nutshell, was to fix prices and make the public pay for it. The plan would eliminate fair market competition and subsidize the industry, therefore having complete control over the industry.

The way the ploy worked was, a “fair exchange value” would be set by the government, this amount would be based upon data from “the golden years”. The government would also deeply embed themselves into the farm industry by making itself responsible for overseeing supply and demand and exporting whatever they deemed to be surplus. To take it a step further, Herbert Hoover believed the Department of Agriculture should tell farmers what crops to grow and the Commerce Department would tell the same farmers how to dispose of the crops, all of which is only made possible through gaining financial control and imposing regulations.

By 1920 the scheme had begun; classified pricing, which relies on a Cooperative (Co-op) to oversee the whole thing. So what you have here is the Agriculture Cartel, which is operated by the government, and working under them are the Co-Ops, which, in the case we are discussing today, was known by famers as the Milk Cartel.

The Milk Cartels basically act as an intermediary between the farmer and the milk processor, providing a service that has never been needed before… but it was to protect the little farms, so at first it seemed ok - and here’s where things get important:

The way the scheme worked was the Milk Cartel would choose the rate for the raw milk coming from the dairy farms. The Cartel claimed it was best to pay all farmers the same (low) rate because it prevented famers from competing with each other, but farmers didn’t like the new rules because they would now be locked into a rate of pay that was not adequate. So the farmers found a way around this; raw milk and raw cheese - skip the processor completely and cut out the middleman. Not only did this generate more money for farmers but it actually lowered the price of dairy because there wasn’t a Milk Cartel and traditional processor involved - but as you can imagine, this went over like a fart in church with the Cartel.

Within a matter of time, the government scheme was failing because too many farmers were going outside of the system which was designed to fully control them. The Cartels recognized their weakness was the free market system as a whole. They knew something had to be done, so they pressed down harder on the farmers, demanding they use the new system - but this time, the farmers fought back...

THE MILK WAR

The milk war began with co-op dairy farmers going on strike. The farmers felt the refusal to produce milk for the Cartels processing scheme would result in higher pay, but it backfired when the Cartels refused to comply.

In Chicago, during a milk strike, in outright defiance of the strike, the Cartels began importing milk from non-striking areas. As a result, the processing plants creating this milk began being bombed. Similar violence began breaking out across the Midwest.

In Iowa, a massive milk strike picketed all ten highways that lead into Sioux City. The picketers set up barricades and completely stopped milk trucks from entering the city. When a truck was halted, the products it was carrying were destroyed on the spot, but the Cartels did not stop. As milk trucks kept being sent into the city, picketers upped the ante. They developed a system of railroad ties and spiked planks attached to ropes. When trucks attempted to import dairy, these planks would be quickly drawn across the highway. Even freight trains were stopped from entering the cities.

The Milk Cartels launched a counterstrike by recruiting law enforcement to remove the picketing farmers. In Council Bluffs Iowa, fifty police officers tear gassed picketers while deputies arrested farmers by the dozens. In a single night, April 25 of 1932, the Council Bluffs jail held 43 strikers. This mass arrest was a huge blow to the movement but nobody was prepared for what would happen next. It was on this night that caravans from all over Iowa began moving toward the city - but these caravans didn’t contain dairy products…

…they contained enraged farmers…

The police got wind of the caravans and panicked. The sheriffs called in support from Nebraska and ordered the officers to prepare for a siege. The police mounted machine guns and waited for the farmers to arrive. As the caravans began flooding into the city, law enforcement realized it was far outnumbered, even with all of the Nebraska officers.

By morning, over 3,000 farmers surrounded the Council Bluffs jail, demanding the release of the prisoners. When the police refused to release the detainees, the farmers threatened to attack the jail and free them. The sheriffs knew the only options left were to start shooting or release the prisoners. Since a massacre wouldn’t be a good look for the city, they reluctantly freed the farmers on bond.

The Cartels retaliated. On August 31st, only months after the Council Bluffs incident, a group of picketers were attacked by “unknown assailants”. When the dust settled, fifteen picketers were brutally shot. The county sheriff and an officer of the local bank were charged with the crime but never convicted.

Come the following year, dairy prices had fallen substantially; the Milk Cartel had grossly miscalculated the outcome of the situation. The milk strike and the violence never lead to consumers demanding more of the product let alone wanting to pay more for the product, as the Cartel had hoped. The failing Cartel played the only card it had left, Congress.

A lobbying group set up by the Cartel, The National Milk Producers Federation, told the Senate Agriculture Committee that the reason for the failing industry was milk processors selling milk too cheaply. The lobbyist essentially lied to Congress by claiming that the free market was the problem and that the government should ensure this never happens again by price fixing. Enter: The Agricultural Marketing Agreements Act.

Instead of telling the lobbyist to figure it the f*ck out, the Agricultural Marketing Agreements Act was designed as a way to help stabilize market conditions, promote fair trade practices, and support cooperative associations. They claimed the new Act was exactly what was needed to save the farms, especially the little farms because without further help from government, the small farms will all go belly-up. To prove this, they pointed to statistics dating back to the years immediately following the “golden era”, but this data was flawed because, after the farming boom, many small farmers became incredibly wealthy and chose to take their riches and abandon the industry as they saw a decline quickly approaching. It also turns out that the true reason for the new Act, the Act that would save all of the little farms, was actually nothing more than eliminating open enterprise to save the big guys from the little farms - the little farms who were going outside of the system, skipping the Cartels and their processors and selling their goods direct, thus decreasing prices and making more money at the same time. Yes, “the Dairy Cartel sought the help of the government to protect themselves from the intense competition of those marginal farmers who were under-cutting the co-ops fixed prices” - and consumers were going to be paying for all of it.

Under the new tax-funding the system, the price of milk increased, so not only were citizens paying to subsidize the industry, but they were paying an inflated price to purchase the product - but this wasn’t enough for the Milk Cartels, they needed more…

NEXT READ: Part 2 - The Illuminati of Cheese but first, if you appreciate all of the work I put into bringing you content you haven’t seen elsewhere, please consider supporting me. Despite popular belief, writing free articles actually is not free, it is surprisingly expensive. In 2024 I have spent thousands of dollars on a new computer, external hard drive, memberships to websites that allow me to research deeper, paying for assorted devices (EMF reader, water testing kits, etc), hundreds of dollars spent on having “supplements” professionally tested, and other things, it all adds up and it is only because of your support that writers like myself can do it.

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SOURCES, NOTES & OTHER STUFF

https://archive.org/details/milkingpublicpol0000mcme/page/n1/mode/1up?view=theater

https://www.history.com/news/government-cheese-dairy-farmers-reagan

https://www.farmlinkproject.org/stories-and-features/cheese-caves-and-food-surpluses-why-the-u-s-government-currently-stores-1-4-billion-lbs-of-cheese

https://archive.org/details/youtube-vZmdwnsdupo

A1 & A2 milk the same:

https://archive.org/details/ERIC_ED353645 “In the late 1980s, the Department of Justice began a campaign of prosecuting dairy companies and individuals associated with these companies for colluding on contract bids to supply milk to schools and military installations. Data were derived from: (1) interviews with officials from the Departments of Defense, Agriculture, and Justice; (2) a review of laws, executive orders, and regulations; and (3) historical data on the dairy industry. Findings indicate that the extent to which the milk marketing and price support programs influence milk contract bid-rigging is unclear. Department of Justice officials said that marketing orders and price supports may foster improper collusion, and that the Capper-Volstead Act's exemption of cooperatives from antitrust statutes may complicate prosecution of bid-rigging cases. Recommendations are made to develop a formal, systematic process for sharing information on cooperatives' pricing; suspend or debar individuals and companies convicted of or indicted for bid-rigging; and provide awareness training to school procurement officials. Appendices contain comments from the Departments of Agriculture and Justice, and the General Accounting Office; and a list of major contributors to the report. (LMI)”

The Great Swindle 1940s https://archive.org/details/0723_Great_Swindle_The_S00125_14_01_16_00