this post was submitted on 25 Jun 2024
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Reposting my deeper level comment as a top level comment...
Let's do some math here...
100 / 365 ≈ €0.274 per day.
You really think that'll put much of a dent in a farmer's wallet?
Let's do some more math. Let's say they raise the price of a gallon of milk by €0.10. Nobody will bat an eye, they'll just chalk it up to general inflation.
A good healthy dairy cow produces ~ 9 gallons of milk per day.
So, €0.10 * 9 = €0.90 per day extra, per dairy cow. That would actually yield the farmer an actual net gain of ~ €0.626 per day, per cow, subtracting the daily tax.
That would actually end up with the farmer gaining ~ €228.50 per year per cow, after the tax.
Ain't nobody gonna bat an eye if they raise the cost of milk by €0.10 per gallon. Nothing will change, except the farmers will jack the prices around just enough that nobody cares and they actually profit from it.
While a tempting logic, in my understanding of the dairy market this is not correct. To my knowledge, here in Finland the big retail chains initiate auctions for the milk contracts, which are highly competed. If a producer tries to raise the price, they will likely not sell any milk at all. On top of that, milk is an important loss leader for the retail chains. The price is kept as low as possible, and it might even be sold at a loss, to tempt customers who will then compensate for this loss with the rest of their shopping basket. Against this, it would be very incorrect to assume that nobody bats an eye if the price of milk increases ten cents.
If the competition is that high, the farmers will have very low profit margins. Any extra expense needs to be added to the price.
This won't affect competition much, as all farmers have the same tax and therefore the same need for increased price.
The only noteworthy thing I see here (based on your information) is that the extra tax is per cow, but the price increase will be on the milk. This will hit farmers with lower amount of milk per cow. I guess this is farmers with more focus on quality and animal welfare.