A counterpoint: these companies were recently bought by private equity firm KKR Co, the same company that loaded up Toys 'R Us with debt and then liquidated it. https://mobile.twitter.com/rhinosoros/status/121424602712711... This bankruptcy filling might just be negotiation in the courts to reduce pension obligations.
I don't understand how bigger waves haven't yet been made about these locusts. Where's the New York Times expose? Proposals by Congress on how to make this vampirism illegal? Literally anything?
If you want to fix this going forward, make all new defined-benefit pensions plans illegal, as we have amply demonstrated that they can't be trusted over the course of a lifetime. Putting your future in the hands of an automaker was bad enough; why do we expect someone to put their future in the hands of a dairy?
A defined-contribution pension plan, where you end up actually owning the assets in question, is the only way to be sure that no one will shrink your pension in bankruptcy, or (for a public pension) reduce them by legislative fiat.
The problem is not defined benefit vs defined contribution really, it's that companies are not really required to fund defined benefit.
There are 1001 third party companies (normally insurers) who will happily underwrite a defined benefit scheme (so if the employer goes under the pensions are fine). But that would mean employers actually making pensions contributions that would actually fund the actual cost. Firms prefer to under pay the schemes. Depending on the scheme/firm/local-laws, that might be by just underpaying it, or by more cunning means like using the funds to buy company stock (so it looks like its funded on paper but you're just as screwed when the employer fails, Ironically this is what the federal government is doing with social security too) or by making optimistic assumptions (if I assume all workers die a week after retirement age and a 9% interest rate, final salary pensions need only cost me 5cents a head today! Can you prove I'm wrong?)
Unions (where they exist and have influence) also don't want to push this. Admitting the employer is unlikely to pay is a serious accusation that won't be proven for 20+ years. If you press hard and the employer DOES up their (real) contributions then that means you'll lose out somewhere else in the compensation package (so less health coverage or lower raises). Plus, If you get someone 1000 dollars more in 20 years, but 10 dollars less now, they won't thank you,they'll demand to know where there 10 dollars is!
This is also the reason politicians won't regulate harder: it would push firms to declare bankruptcy sooner (and the electorate punishes that, better let the problem worsen and hope its the next guys issue) and it would mean many firms withdrawing or cutting back their schemes. And again, people would rather have the promise of a good pension (that will likely never happen) than the certainty of a mediocre pension.
The key issue here is a mix of costs and people being strongly incentivised to lie about a cost now as the problem won't happen for decades.
The only advantage defined contribution has is that it is harder to cheat. But actually, defined benefit schemes are less risky and far more appropriate for the average dummy than defined contribution schemes.
McClatchy just had pension trouble. So does my home state of Illinois. So does this company, apparently.
You seem to think it's possible to just magic a large-scale change in human behavior into existence. It isn't. I think DC+social security is a pretty fair compromise. You're never going to starve if you totally screw up. There's also Medicare to help pay medical expenses. So the worst-case scenario isn't awful. On the other hand, if you want a comfortable retirement with a nice house, travel, etc., you need to be a good steward of a DC plan.
I also think having people with a little more skin in the game (the stock market) will help to tamp down this tiresome class politics about how the 1% is screwing everyone over. Pensions are big investors, it's not fair that some investors (pensioners) get bailed out in a bad market environment, whereas others (DC plan participants) don't. Don't forget, pensions don't magically create money, they have to invest and rely on the whims of the market just like DC plan participants.
Plus, there are good DC plans. The better ones opt you into a target date retirement fund and automatically invest in a reasonable basket of securities so you don't have to figure it out yourself. Human Interest is a great example of a simple, no-frills plan I've seen. My wife's Schwab account is too complicated.
I get that DB might be better in theory but I fail to see how, given the constraints of reality, and human nature, and politics, we aren't going to get a repeat of the current DB fiasco over and over again. Just look at the incentives.
I strongly agree about the "mix of the two". Though social security is just a defined benefit scheme that's bankrupt and replying on a political bailout so I'm not sure I'd include it.
The big issue here though is how to make either work for the average person? A defined benefit scheme where the employer is fiddling the books will fail. A defined contribution scheme where the management company is charging fat fees and pushing risky investments will fail. Can we really trust the majority of people with no financial acumen to tell the difference?
I feel like both require the user to swim with sharks right now...
I think DC is about 85% of the way there. All we need are slightly better defaults in how money is invested. Fidelity already does this, I remember signing a big stack of forms to "take the safeties off" to be able to trade it as a raw brokerage account. 401(k) custodians are fiduciaries, btw.
Whereas DB, it seems like every place and in every time, there are always incentives to underfund, to cheat, to push liabilities around, to misrepresent them, to dump them on taxpayers. These things are closer to immutable human nature and won't change, IMO.
The bigger issue that is NOBODY can really afford to retire given how long people are living, escalating medical costs, and low rates of return. The DC people are just ahead of the DB folks in realizing this, because they're relying on bailouts there isn't enough money anywhere to fund. Illinois is a case in point.
I think there is a more fundamental question here with DC models: human nature.
If you tell people to shut up and pay and we'll assure the outcome, they can do that. Thats DB.
If you give people an "account" (even with good default investments), people have to manage that. They have to fill it up when they have a bad year, with actual cash from their current accounts. They have to ignore their brother in laws who put all the money in enron and made a bomb and tells you you're an idiot for sticking low fees. They have to pay attention and watch out for changes to fees or laws. And they have to start moving the money to lower risk items and plan 5+ years ahead to retire. And even then, that's just getting the index fund strategy right. The strategy may fail. They have to put money in when a market goes down and take it out when a market goes up.
I doubt very much that people will succeed at that. That's the core flaw in the DC model.
Personally I think that sort of work is better done centrally.
The problem with skin in the game is I know of a few people who lost everything to a scam. Now forced to work at WalMart to make ends meet... I hope I avoid that with my skin in the game, but I'm well aware of how easy it is to fall for scams and am thus afraid that I will as I get older.
The other issue is that DB was historically oriented towards lifetime or at least long-term employment at GM, federal/state government, etc. It doesn't have to be that way. I suppose you could have some sort of common pool that employers paid into. You're still creating what's basically a large organization-specific retirement scheme. But if you somehow extend it more broadly, it starts to look a lot like another version of Social Security--which probably doesn't make a lot of sense.
I like the fact that I have a DB plan from a prior employer but, as you say, I'm not sure it's a great fit for most situations moving forward.
> But actually, defined benefit schemes are less risky and far more appropriate for the average dummy than defined contribution schemes.
Well, yeah because defined benefit actually makes some kind of commitment on what you're going to get, whereas defined contribution just tells you what you'll give, right?
I mean it's all in the name. DC is just "give us yer money and sure we'll do our best for you, as long as our fees are paid"....
Well, it's more than that. With defined contribution you can invest in a reasonably diversified pool of assets and, while there are no guarantees, you will most likely come out OK over a long period of time.
The bigger problem is that unsophisticated investors may overly invest in risky assets that don't pan out or they don't invest at all/borrow against savings/etc.
Ok. But even with a sensible investment strategy a major economic decline close to your retirement can result in you getting a lot less than you expected, right? It just seems to me a pension should principally offer a reasonable level of certainty (to those that choose to have it).
The thing is that pensions aren't magic money trees. They're invested in the market just like anything else. So if there's a major economic decline close to your retirement, they may well become insolvent. Maybe they'll be bailed out (with basically other people's money) or maybe they won't be. (Pensions also don't really protect you if inflation spikes.)
Individual investors do have the option of investing in things like treasuries and annuities. Of course, in an economic collapse, all bets are off. But if you're willing to put up with low returns (maybe 3%), you can invest your money pretty safely.
DB pensions spread their risk and return over multiple cohorts.
DC retirement plans heap all correlated market risk on individual retirees.
Given that the risks of an underfunding are greater than an overfunding, that market returns are exogenous to the merits of any given retiree, and the goal is to supply adequate income to live on in retirement, the arguments in favour of a DB plan, a payment mandate by the employer, a government backing, and severe penalties for malfeasance, including clawbacks to investors and creditors of deadbeat employers, seems more than appropriate.
>A defined-contribution pension plan, where you end up actually owning the assets in question
Assuming of course that you have actually saved over time and have picked appropriate assets to invest in.
Defined benefit plans have their problems--both the funding and the fact that they were historically designed around long-term employment at a single organization. But they do have the virtue of being a retirement income stream that requires no action on an employee's part.
ADDED:
>no one will shrink your pension in bankruptcy
Except the market depending upon where you have invested your money
The difference is that a typical asset allocation strategy in a target-date fund isn't going to suddenly fall 85% and leave you with 15% of any promised benefits, whereas the 1963 Studebaker bankruptcy did exactly that to its employees. (If you're about to retire, it will have at least half of its assets in bonds.)
This risk is why Congress passed ERISA and created the PBGC, which nevertheless is at risk of failure itself, with its own projection for its insolvency being about 5 years out.
This just turns into another class of scam, where a different class of financial vampire takes the guaranteed stream of revenue from your pension system and systematically diverts a larger and larger share into their own pocket.
Historically? Maybe a little, yeah, but even at ridiculous rate of, say, 2% annual fees, you're just not looking at the same sort of massive capital losses you could expect following a major corporate insolvency...
And more and more pension funds offer low-fee index funds than ever before. Praise Vanguard.
Or not allow the type of behavior that makes these boring industries less boring. Borden has been around for like 150 years.
The whole scenario of giant global entities taking over agriculture and food services is probably the most obviously bad but ok things that will happen in my lifetime. We've declared dairy some sort of environmental catastrophe, to be replaced by cloudy water percolated through soy, almonds and similar products, which ultimately will roll up to 4-6 companies like Coke, Pepsi, Inbev, etc.
Tucker Carlson had a good segment on one example of private equity destroying a small American town by bankrupting a business that was by all measures doing well. I haven't seen it anywhere else in mainstream media.
No, Tucker Carlson is not news. He's a pundit/commentator who has a talk show. Neither is John Oliver. I'd almost say they're flip sides of the same coin, except Carlson trends WAY right (often right into conspiracy theory land) and Oliver is more center-left.
He is a comedian, and always denies being news. That doesn't change the fact that his show is one of the most informative shows on TV. It absolutely is journalism what he's doing. He's just dressing it up in jokes.
Yes, but being a professional journalist doesn't presently correlate with journalism skills or integrity. His work is closer to good journalism than most TV news programs or "news hours".
I don't disagree with that. There's something broken in journalism today, for sure. No way should an admitted comedian/entertainer provide better news than many "real" news outlets.
See this is where John Oliver (and before him, Jon Stewart) are really duplicitous. They talk about the news in a certain way that implies that they have done their research and are delivering useful information, but they crack wise as they are doing so, in such a way that obviously fits in with whatever narrative or reaction they're trying to sell. And then when they get called out for being dishonest or biased, they say, "wait a minute, I'm just a comedian!"
Have you or any of your friends ever worked in a non-tech, non-finance business?
Many of them are incredibly poorly run. Bad hiring practices, little/no investment in operations or process, etc.
All I'm saying is, you have to look case by case at what's going on. Sometimes the PE firm does basically loot the business. In others, entrenched management has been there decades with little board or investor oversight, is performing way below the rest of the industry, and really does need a swift kick in the ass.
Don't rush to blame the PE guys here anyway. Everyone knows Americans are drinking much less milk, they probably bought it at a deep discount knowing they might not be able to turn it into a successful business, and that bet failed.
Tech and finance businesses are also horribly run. There's no evidence suggesting managerial or process excellence in technology companies. The reason finance and technology companies are profitable has everything to do with the nature of the product they create and the leverage it has in our society today.
Finance is famous for making people sitting at their desks all day waiting to get a deck at 11AM to put in logos with the correct resolution.
No. They're better run because they're more competitive and only the best-run firms survive. There is more pressure toward excellence, and pay reflects this.
Can you name me the 10th-best PC operating system maker? No, you can't, because there isn't one. Whereas I'm sure the management practices of a typical small-town pizza shop aren't great.
I'll grant that perhaps companies get lazy if they're monopolies but that doesn't last forever. I just think it's silly to suggest that companies in cutthroat, competitive industries are less high-performance than average, smaller firms.
It's hard for the NYTimes to run stories on the evils of private equity when their employees and owners are completely intertwined with the people who work in that industry.
I can't overstate the degree to which all the different industries in New York socially overlap. The degree of separation between someone who works in technology, media, finance, publishing and advertising is 0 or 1. Those relationships become marriages, friendships, acquaintances, people sitting next to you at charity dinner.
Perhaps most critically the Times is a family owned business, the owners are billionaires, the current owner is also it's publisher. They have no interest in poking around the fundamental mechanics of how rich people operate in this country.
Shiny stories of fraud or insider trading or whistleblowing? Absolutely. But questioning the core mechanics of capital, especially capital centered in New York operates would never happen.
Some of them are vampires, sucking blood from healthy individuals. But some are just maggots: recycling resources that would otherwise be wasted and cause wider infections.
Which is which (and when since they switch roles sometimes) is a matter of opinion not fact. You can't really regulate that any more than you can arrest people for being "bad"...
All the messages in that movie really bother me just because it's so unrelatable as a man. Many women I know see it as just a prince charming story and like it because of that. Aside from the corporate raiding married man picking up prostitutes on business travel, I think I'd find it more relatable if there was a world where women were reliably scooping up men while the man's life was in shambles and changing their life situation. But no, if you want companionship as a man even if its the unhealthy kind, you have to have a big expense account. 1 out of 5
Would you chase after a fat, ugly, disgusting woman? I'm guessing no unless you were incredibly desperate. Most women are attracted to a man's status and success the way most men are attracted to physical beauty. You don't need a lot of money, but women don't want to hang around with loser.
A 40% of American women are obese, men still chase after them. 2.2 million more women go to collage than men, that’s one of these signs that women slowly becoming the breadwinners is many relationships with a surprising number of stay at home dads (2+ million). In older couples it’s also not that rare for men to be unable to find work near retirement and women end up as the sole income.
Gender stereotypes may have some truth to them, but it’s far less than most people seem to think. Everything else being equal, most women would prefer to date attractive men and most men would prefer to date wealthy women.
> Most women are attracted to a man's status and success the way most men are attracted to physical beauty.
oh wow, I never heard of that happening before thanks for the tip.
Like I said, the movie itself would be more relatable if any possibility of the circumstances were relatable for a man. For women its practical to dream about a man choosing them for qualities they were born with while the man created every circumstance in their own life to obtain wealth and security before eventually decide to choose that woman, and that movie caters to that. It took me a while to figure out why certain romance movies were unappealing and predictably so between genders, and that's what it is.
I don't actually care about or mind the reality. The extent of my point is that watching depictions of it aren't interesting when no part of it is something you can dream about and have a chance of it happening.
Proposals by Congress on how to make this vampirism illegal?
If this is an issue for you, vote in members of Congress who care about this. There's an election coming up this year. Your representative in the house will be on the ballot, and maybe one of your senators. Please find out where the candidates on your ballot stand on this issue.
I mean, books have been written about PE, LBOs, raiders, and financial vampires for more than 30 years. Movies have been made. It’s literally one of the most enduring financial stories of the last 35 years.
The only thing that has changed is that PE has managed to take some cues from VCs and mount a PR campaign aimed at techies and other new-money types to make it seem like the industry isn’t as vulturistic as it has always been. And techies and new-money investors believe them. Because it’s easy to believe the wolf until he kills you or leaves you for dead.
I've certainly seen a handful of NYT articles that weren't shy about pointing out the mess that is left behind and questioning what if any economic value there is.
I mean it’s been a huge thing that people have known about for decades. Romney was one of them. Barbarians at the Gate is a popular book on KKR in particular and was made into a movie.
As to why it’s not illegal... there’s both the realpolitik “who are friends with congresspeople” as well as the wonky “how do you make it illegal? It’s just combining a lot of elements of capitalism”
The way you make it illegal, of course, is preventing stuff like directors being able to get paid big bonuses for buyouts (basically bribes to accept LBOs), by properly classifying such movements as stealing assets from the company
I don't live in a world where companies stand by their financial contractual agreements to employees or even offer them. It is also obvious to me that the companies that did this often don't have the money to fulfill it.
Why would I want a law to warp the market even further to protect pensions and these zombie companies?
Perhaps my observations reflect the sentiment of others and that's why bigger waves haven't been made, because we don't care about this slow motion trainwreck.
>..these companies were recently bought by private equity firm KKR Co
Not KKR.
In 1995, Borden was acquired for $2 billion by Kohlberg Kravis Roberts & Co. (KKR), which proceeded to sell off pieces of the company to various buyers. Washington, D.C.-based ACON Dairy Investors, LLC purchased the company in 2017.
Not sure whether the twitt narrative is correct. From mundane wiki looks like KKR tried to right the sinking ship..
Borden suffered significant losses for the period 1991-1993...In deep financial difficulty, Borden was bought out by Kohlberg Kravis Roberts (KKR) in 1995. KKR increased the pace of divestiture, but was unable to right the company... In 1997, KKR focused the company solely on its pasta and pasta sauces lines. But the new strategy failed as well..
There have been studies showing private equity does more good for dying businesses than bad. Congress attacked them heavily during the 2008 crisis and they were the first companies called in to congress to answer "tough questions". But it turns out they didn't cause the crisis and that more companies are better off after PE acquisition (ie, they got turned around for the better and created greater economic production had they not existed). Basically most of those companies would be dead without PE as they are often the only solution left, even if it often seems on harsh terms.
Private equity firms aren't all just corporate raiders of the 1980s that certain politicians try to spin them as.
That's not to say that small towns selling off public services to them is a good idea. Or any other public/private partnership bullshit that is sold as 'free markets' when its the mostly just politicians and their wealthy connections being complete vultures creating things that are nothing like markets.
The book "King of Capital" has a really good overview of the history of private equity:
They do really awful things, too, and they are rewarded outrageously for it with very little personal risk. Taking a 10x levered loan to pay for a company, transferring the debt to them, and cutting the company loose after paying yourself a dividend that more that covers your loan principal has nothing noble about it at all.
I don't want to be acquired by them, but I have much more respect for shops like Thoma Bravo that act as operators and acquire strategically for portfolio companies that places like Bain, for example.
I personally don't care much for defending shitty Wall St companies nor LBOs, I just wanted to point out that a lot of FUD surrounding Private Equity is simply that, FUD.
There are a lot of bad players or stupid businessmen and politicians in municipalities who have given it a bad name by making dumb exploitative deals. Which I do not condone or wish to defend.
But PE has still done a lot of good turn arounds and has been proven via plenty of data to be a net-gain in terms of its economic contribution to society, saving plenty of jobs and American companies that were headed for certain death.
Companies within all industries always vary in quality, but I think it's silly and dangerous to define entire industries merely by a small group of it's worst players - like the way people have been trying to pin the entire Silicon Valley industry to Ubers and Theranos, or Google/FB acting poorly, despite is otherwise countless success stories.
This sort of thinking, political spin, and media coverage is what creates destructive gov policies aimed at the few small minority of big bad guys but often ultimately just harms the other 90% of mostly harmless good guys with needless hoop jumping or straight up banning of otherwise useful contributions to society (which there have been countless examples of such self-destructive - but of course well intentioned - policies driven by similar emotional reactionaryism).
PE has been a punching bag for a long time. My only wish is that it is done rationally and using an evidence based approach. Politics has a habit of stirring up hysteria with stuff like this, disconnecting it from the reality on the ground, which LBOs and PE certainly has a longstanding legacy of, which you can see thoroughly in this thread. It's hardly new. But yes of course it is an industry notorious for its leeches and one that should be treated carefully, not with white gloves.
Just remember the worst stories take up 90% of the headlines, the countless successful ones often happen quietly, or in less read retrospectives or books. The stuff that rarely tops Reddit or HN, so it's easy to assume that all companies doing LBO are evil blood sucking monsters if you don't pay close attention.
I don't entirely disagree with you and I'm not trying to score points by dunking on an unpopular boogieman. There are certainly poorly structured and operated companies, and acquisitions by companies that improve their management and capital structure are good. I just think that - in paricular, with the debt market we have right now, that leveraged buyout firms are on the net bad. I think it's maybe as much or more a consequence of poor yield options and gutted regulations, structured products are like buying sausage in the days of Upton Sinclair. There is too much capital out there, I hate to say. There is a lack of discrimination on the fixed income market that would have put brakes on lousy LBO operators, and there are enough of them because the funding is available. That is magnified by engineered bankruptcies and pension haircutting/offloading, which goes beyond the destructive business outcomes I see lately.
The company might be better off when a PE firm is done with the "turn around" but the employees, specifically their retirement funds, are consistently and demonstrably worse.
The narrative from firms like Bain is that they use their expertise to streamline failing companies and restore profitability. In reality, it seems that the impact is mostly legal/financial, even when the PE firm isn't a de facto corporate raider.
A huge fraction of increased profitability comes from the fact that interest payments are tax deductible while dividends aren't, so LBOs artificially reduce costs. Rearranging debt obligations can break free up cash by dodging severance and retirement expenses. And the ability to recoup losses via unsustainable, high-margin practices encourages PE firms to pursue riskier turnaround approaches, then brag about their success rates while failing to acknowledge that their failures are often more damaging than gradual, non-PE-driven ones.
"Alive or dead" may be easy to measure, but the impact on people isn't binary; PE tactics for raising the survival rate largely come at the cost of worse outcomes in both cases. And the cases where PE is straightforwardly beneficial are usually the least-troubled firms, where it's acting more like investment and tax reduction.
That's definitely true if you've bet on consumption increases and preempted meeting that demand, but milk prices are pretty volatile, jumping +/- $4/cwt throughout the year, which makes me think that COGs are padded enough to give you plenty of time to react.
Gut feelings though.
For comparison, red meat consumption in the US has fallen 15% in the last 10 years and Tyson stock$ is near it's 5 year high.
The title of the article states that milk producers are "going bankrupt," but then cites the rising costs of raw milk, which seems like a good thing for a milk producer.
So I look up the company on wikipedia and Borden Dairy is a processor & distributor, not a producer.
Furthermore, "employee pension obligations" being cited as a primary cause of bankruptcy without any more details raises a red flag for me. This article sounds more like they're reporting on the press release of some kind of corporate raiders than journalism.
Pensions are just deferred compensation, part of the total benefits package (salary, health insurance, etc). They're not entitlements, giveaways, lottery tickets, whatever.
Maybe the most insidious side effect of transition to 401k was tricking people without pensions that somehow pensioners are unfairly compensated.
I disagree with a lot of that. Defined benefit plans make all the sense in the world sort of empirically or like maybe narratively(?), but the problem is that risk isn't handled equitably. 'Unfair' feels like it has more connotations than my liking, but the main source of that feeling imo is that pensions have frequently made implied rates of return that had little to no chance of realization.
It's easy to thumb your nose and say "well that's the company's problem", but what it does illustrate in a more general sense is that counterparty risk is very real, especially in underfunded pensions. While pension plans have a large amount of money saved, the reality of the situation is that part of a pensions mechanics look like a claim on a company's future earnings. That's what grinds my gears about pensions, there's a lot more risk than people think, and it's foolhardy to assume the employer assumes all the risk in theory or practice.
The best thing about the transition to 401ks imo was that it made it abundantly clear that there is a large amount of risk in funding retirement. The downside is yes, companies made it clear they were no longer willing to assume any of that risk themselves.
The money is supposed to be invested in part by the employee and the employer at the time of payroll. This money is then moved to a fund, impossible to be touched by the company forever and ever. The fund invests the money, it grows, and then you can get an income in retirement after many years. The same could be done by the employee itself by just saving part of his paycheck and investing in a mutual fund, but most people don't have the discipline to do that so a defined-benefit pension protect the employee from itself.
That's how it works in other countries like Canada. It's relatively easy and failsafe if well implemented, I really don't understand how it can be legal for a company to access the fund like in the story.
It's a shame so many of them are so badly managed/corrupted though. As usual, most stories about pension failing are about gross mismanagement (not paying into the plan as required) or corruption (drawing into the plan innapropriatly).
Unfortunately I don't know enough about it to offer an opinion on this specific case. I only know it will pay only part of the promised benefits. But from other pension plans I've seen, this happens because the plan is undercapitalized. This usually happens because of:
a) missing employer contribution to the fund on every paycheck
b) mismanagement of the fund
The second point can be very varied and only limited by imagination, from embezzlement to government action. I've seen laws passed in the past passed about being able to take a loan on certain public pension funds without interest, which shows the complete lack of understanding about how these pensions are supposed to work and the actuarial math behind it.
The same people you get your 401k matching money from when a company goes bankrupt and sells its assets. The money assigned to pensions, like the money assigned to 401ks, should not be something the company can ever take money out of or under-fund.
In other types of theft, there are mechanism for recovering the stolen assets. It seems like in theory you could hold the CEO, Board, and other people who made money off of the theft of the pension fund responsible and hold them financially liable for making the pension whole.
In practice, this would probably be messy, very costly, and extremely unlikely to happen.
Companies need to pay government insurance on their pension and if they go bankrupt, the insurance pays out a capped amount (~$60K per year) on behalf of the fund.
I keep reading weird stuff from the US about employee pension obligations being a burden on companies, and those savings getting eaten or stolen in all sorts of corporate shenanigans. Are these things really not handled by life insurance companies and subject to all sorts of regulation? That sounds woefully irresponsible.
Traditional “defined benefit” employee pensions in the US were treated as a balance sheet line item. There wasn't a separate, fenced off, account where funds were secured. In the 1980s it became popular for “corporate raiders” (today’s “private equity”) to target companies with mediocre corporate results but well funded pensions. Because the pension obligations weren't sequestered, you could legitimately take over a company, pay yourself a dividend using the pension fund, strip the company of assets and then run it into the ground.
Through it all, the MBAs, the corporate raiders, the bankers would say (and still say) they're just improving the efficiency of these companies.
Is this still true for majority of the US working force? As an European I find it ridiculous that your pension could be wiped out like that, and not be completely separated from employer either managed by state, or dedicated pension fund manager (what I prefer but citizens have no say in this, you have to move state to change this). Companies go bankrupt all the times, small or big.
If it gets wiped out, what happens to those people? Getting by on social help, food stamps and super basic healthcare through rest of their lives?
Does this not happen in Europe also? It's rare for US employees to lose everything, but fairly common for pensions to be reduced to <50% of their promised level. And I thought I'd heard about similar cases by European companies, like Maersk attempting to slash pension payouts even without going bankrupt.
I don't know about other European countries, but in Netherland, it's a major cause for national alarm when a major pension fund is 10% short. This is something that happened after the mortgage crisis (because the money had been invested, and the stock market was way down), and there was a big discussion about whether people should pay extra, or pensions should be cut, or something else.
It's certainly not common, and rules were immediately changed to prevent this from happening again.
The employer doesn't have access to it unless it's the pension of the single owner of the company. In that case: it's your money, and you can fuck it up if you like. But allowing other people to fuck up your pension is considered to be a terrible idea.
In fairness, this is part of why the US has moved away from employer-managed pension funds. Pensions are still common in government, universities, and certain lifetime-employment industries (e.g. power plants). But even in good, white-collar jobs there's been a shift to 401k matching, where you get a personal retirement fund which your employer funds with some amount of money beyond your normal salary.
There are a lot of reasons for that switch: it saves on the administrative headaches of having pensions from several companies, it encourages private retirement savings (because it's "matching"), it saves companies money (because many people don't contribute), and it lets companies keep predictable finances (because it's an investment paid up front, not a lifetime or fixed-dollar obligation). But on the employee side, a lot of the reason people with bargaining power accept it is that they trust 401k funds to stay safe (except from stock market crashes), and don't trust companies to fulfill pension obligations.
The downside, as with healthcare and many other things in the US, is that when "good" jobs circumvent the problem, it takes away most of the social pressure to actually solve it for everyone.
Getting it away from the company's budget is definitely an important step, but from what I understand, both old-style US pensions and 401k still fall short of the Dutch pension system, which has companies paying the money for the pensions into independent pension funds, so the pension isn't threatened by bankruptcy or mismanagement from the company, and the pension fund treats it as life insurance that keeps paying as long as you live.
It's still not perfect; stock market drops and sudden increases in life expectancy can mean a pension fund won't be fully able to cover its obligations. This happened after the 2008 recession, so new laws demand that the funds need to aim for more leeway in their funding.
Of course that means that with a good economy, the fund may end up with a lot of money it's not obligated to pay. For this reason there's a movement to give people a larger share of this risk, both on the beneficial end (when the economy grows more than expected), and effect of economic downturns (which is going to suck for people who retire during an economic downturn).
This is actually what my pension does: I have a special kind of pension fund for self-employed freelancers where I seem to own the money in the fund and carry its risks, whereas normally it's the pension that owns the money and the risk. I'm not entirely sure how that works tax-wise, because it is still tax-deductible as far as I know. But if the investments do well, I get more money, and nobody's bankruptcy can cost me my money, which might still be a theoretical (though not actual) risk for a standard pension fund.
In the worst case, yes. Most often as a creditor they get something like 20-50% of their pension. Then people often are forced to sell their house. It's devastating to be sure.
And "super basic healthcare" might actually be overstating the case.
Mostly, no, because defined benefit plans have been all but killed off. Most union jobs have a defined benefit plan, but union representation in the US is under 20% I believe. Pension plans are "insured" by a Federal plan (PBGC) but it does not guarantee 100% coverage and has been under severe strain as the number of pension plans drops.
Most of the time it's seen by management as an expense with no positive business value (they pay out to people that are no longer useful to the company)... Therefore it's a major target for elimination if possible. Bankruptcy is a great way to do this.
If you remember that the "best" leaders from a stock investor (or greedy owner) perspective are psychopaths (lack empathy), and these people actually look really great on paper (lower costs, no/little immediate impact on profits), it's not surprising.
That's exactly why it shouldn't even be on the company's budget. They should pay for it to an insurance company while the employee works there, and once the employee doesn't, the insurance takes care of it. Take the employer out of the equation once they're no longer relevant.
>Take the employer out of the equation once they're no longer relevant.
Not exactly, if the company is willing to go so far as bankruptcy / reincorporation... how will any previous contracts with whatever insurance company last through that?
The idea is an employee’s pension must be fully funded before they leave and then handled by a 3rd party. At that point the company could dissolve without impacting retired workers.
It’s true that 401(k)s also have this feature, however many employees prefer the defined benefit a pension provides over managing their own returns and the temptations associated with managing money. The core issue is really poor US regulation over any specific issue with pensions.
PS: The swap to 401k’s in the US is mostly about cost savings. Companies can simply reduce their contributions without much if any backlash. Meanwhile, third parties profit from managing 401k’s and therefore market them heavily.
The insurance company is effectively acting as a giant escrow account on behalf of the employees/retirees.
The employer pays into the account at whatever rate is required to fully fund retirements. The insurance company manages those funds. If the employer goes bankrupt, the funds are not accessible by raiders/PE firms.
Defined benefit means that the employer buys a perpetuity from the insurer on behalf of the pensioner. The insurer requires the employer to pay the cost of the benefit divided by the average rate of return after operating and profit margins.
If the insurer can earn 6%, and takes 1% of that, then if an employer wants to offer an employee a $50k/year pension, they need to pay in $1M before the employee's retirement to fully fund it. Over an expected 40-year career, if that employee was basically making $50k/year in take-home pay the whole time, adjusted for inflation, the pension cost would add $25k/year.
Actually, the cost to fund it would be a bit less, as the pension usually ends when the pensioner and their spouse die, so not a true perpetuity. The insurer calculates the expected time from retirement to death, and discounts the up-front cost by the current value of all those payments that won't be made after the beneficiaries die. This works out better the more pensioners can be averaged out in a big pool, which is why big insurers have an advantage in offering these sorts of financial products.
But no matter how you slice it, defined-benefit plans, if fully funded by incremental contributions with each paycheck, add significantly to labor costs, especially when the insurers can't get good investment returns. The lower the return, the more the plan costs. And the higher the return, the more the insurer tends to take for itself.
The 401(k) reduces the pension cost to the employer by capping it at a lower percentage of employee take-home pay, and furthermore dumping all the market risk onto them.
Completely different. Defined benefit has always been better for the laborer, insofar as the company can keep its promises. Defined contribution is better in cases where the employer is untrustworthy or the employee can invest wisely such that they can get the same returns as the insurer, but without taking a cut off the top--as one might get with no-fee, broad-market index funds.
A 401k is an account, funded by a mix of employer and employee contributions, that's beyond reach of bankruptcy. That part is the same.
The only bit that's different is the self-management of assets, of which many companies are happy to do, increasingly for lower and lower fees. 0.2-0.3% being common which I bet goes toe-to-toe with good pension managers.
You're neglecting the part where a defined benefit plan pays a fixed amount until you die (assuming it remains solvent, which is a problem because corporate raiders are allowed to cash them out under some circumstances). A 401k can run out - they often do.
Not really. A pension you get your money until you die - there is no possibility of running out. A 401k you can live longer than expected and run out of money.
That sounds like it's still lacking the life insurance aspect of it: you want it to continue paying out, even if you accidentally live longer than expected.
The way it works at least here generally is that the pension fund is held in trust, on a per employee basis, by an insurance company (usually) employed by the company to do that. So it's (in principle) immune to bankruptcy of both the employer and third party insurance company.
There are regulations and insurance policies for pensions (PBGC), but they still operate independently and can do very badly if the projections of the costs that were made in 1980s when all these people were promised benefits never grew fast enough or had a few bad investments. The PBGC also only insures a limited portion of the promised benefit, so pensioners benefits usually will get cut either to prevent the fund from failing or it will get cut if it fails and gets taken over by the PBGC.
You should look into the GM/UAW worker bailouts. It's total corruption, top to bottom. Basically, the UAW 'invested' in GM unsecured debt. GM files for bankruptcy, those bonds become worthless. With no authority whatsoever to do so, the US government gave those bonds seniority in the bankruptcy, nationalized GM, and left senior creditors holding the bag. All of this was completely unprecedented and way outside of what the law allows. There wasn't a lot of mainstream coverage of all this, you had to dig for smaller journalists to find what was actually happening.
But anyway, that's the name of the game. Take on a lot of debt, stuff that debt into your pension, go bankrupt, company is restructured without pension debt. There is also the Pension Benefit Guarantee Corporation, so this corporate debt is shift to the tax payer.
It's corruption that knows no bounds in the USA. Both major political parties are guilty, we have to dismantle the federal monster, it's the only way forward.
One of the issues is that Walmart opened a new dairy plant here in Indiana which considerably increased milk processing capabilities for the region, as a result companies like Dean Foods had to turn around and cancel contracts with farmers in Indiana, Ohio, Pennsylvania, New York, Kentucky, Tennessee, North Carolina and South Carolina.
That allowed Walmart to gobble up the best of those farms (30 something farms between Indiana and Michigan), for cheaper. Given that they're processing, bottling, and distributing it to their own stores let's them sell it cheaper too, which then makes companies like Dean Foods lost contracts and now suddenly have pretty stiff competition.
Walmart didn't replace all of those contracts Dean cancelled (and I imagine other processors/distributors too) which really hurts the small guys that have 50, 100, 200 cows.
Keep in mind a cow is only good for 6-7 gallons a day, so these smaller farms just aren't worth it for a massive company like Walmart. Within 2 hours or so of the plant they're servicing close to a thousand stores (if not more once you include the grocery-only ones) so those smaller farms basically end up screwed with no one to sell that milk to.
It's not like you can just go "ok we'll let's butcher some of those cows and make some money while we figure something else out" either because, dairy cows are generally older and only good for ground beef and really cheap cuts. Even with a beef cow you're only going to get $700 or so.
At 25lbs~ of dry weight food a day per cow, you might get a little over a year of hay for one dairy cow sold for ground beef - basically those contracts getting cancelled just kill the small dairy farmers.
Rising cost of milk isn't everything. The cost of production is important. I once met a farmer with ~3000 cows - in 2014 he was selling milk for $25 (hundred weight I think is the unit) and losing $100,000 a month, when I met him a couple years latter he was selling mild for $17 and making money hand over fist. The difference is in 2014 corn was $7/bushel, and it dropped to $4, and other such input costs.
Prices might well be rising because producers are going bankrupt. One of the signs of a healthy markets is low profits & low costs although of course 'low' is all relative.
But yeah, probably trying to get out of pension liabilities.
I’m constantly amazed at how cheap milk is in the grocery store. A gallon of Great Value 1% milk is $2.77 now. That seems low for what you are getting (a gallon of protein rich fluid milked from a cow and transported to you). How much profit could be left? I’ve heard that grocery stores sell milk for less than they buy it for just to get you into the store, because they know you will buy other things. I haven’t checked the truthfulness of that statement though.
The Federal government operates a comprehensive system to manage milk prices to consumers and also to subsidize marginal dairy producers. It's also illegal to sell raw milk and other similar products in most states. The milk producers are often not making money from the sale of milk. When milk prices drop below certain levels, the federal government steps in to subsidize dairy farmers. This creates perverse incentives for the dairy farmers to produce more even when the market is signalling that more dairy farms should close and consolidate.
The entire system is currently pretty strange. Even family farms wind up feeding into corporate wholesale conglomerates. So the "small farms" that are non economic wind up supplying the corporations who pasteurize, package, process, and market the milk for retail both as milk and as other finished products. The corporations that can bear the regulatory and other costs wind up profiting from the farmers who are indentured to the government. They may not be literally indentured but it's a good metaphor for the relationship. They get bottom price milk from subsidized producers while keeping the retail profits.
Grocery stores have tons and tons of loss leaders. Anything perishable unless it is premium priced is probably going to lose money. Dealing with low priced perishable, refrigerated, fragile, leaky products is really tough. The profits are in dry goods, drugs, supplements, and prepared foods.
What is happening seems to me to be retribution for an industry ripe with bad practices like overusing hormones and steroids, and abusing cows...
It's a shame that milk farmers got to bail out without being held responsible. The fast growth in alternative milk was driven by bad practices by the dairy industry, and when unethical behavior is driven by shareholder expectations, it only gets worse.
We need to stop supporting in and investing in companies that poison food supplies, otherwise we're literally suffering for the profit growth that that creates.
“Supermarkets sell food staples such as bananas or milk at less than the cost at which they were purchased in order to draw customers to their business. These items are typically strategically placed far from the entrances of the store to enhance this effect. In the case of milk, supermarket chains often refuse to pay market rates to avoid making a loss.”
> I’ve heard that grocery stores sell milk for less than they buy it for just to get you into the store, because they know you will buy other things.
I wonder if this is why they always put it in the back of the store? That way you have to walk through a vast array of higher margin things that you might suddenly decide you need on the way to and from picking up a gallon of milk.
There's a few reasons. Oftentimes the milk cooker is refilled/restocked from a walk-in cooler behind it accessible only to employees, and it would obviously be difficult to put this anywhere other than the back wall. I suspect it's also easier to run the utilities for freezers and coolers around the perimeter of the store and then down a few aisles.
Probably not. There's a more practical reason in most big stores: the shelves where the dairy items are displayed are the front wall of a refrigerated room. This way the product can be placed directly from behind, and never taken out of the cold.
And in a store where the cases are stocked from the front, they need to be up against some wall so that they have access to electrical outlets (and maybe drainage for the compressors, depending on the nature of the case).
That is a factor. As others have pointed out, having a fridge at the back is a useful logistic factor.
~20 year ago I heard about stores putting milk up front for those who just wanted milk quick. If you looked though the milk in front was more expensive (different bar code) than the milk in back. This hints that getting people to the back is part of the reason. I haven't seen milk near the front of a grocery store in a long time though (I don't know why).
OMG that rearranging of the store makes me so angry. Just when I get a system down for getting in, getting what I need to get off my list, and getting out and they throw that monkey wrench in.
That and using stacks of items as road blocks in the aisles to slow me down in front of higher-margin items. They don't need roadblocks with my pokey-shopping neighbors who stand in the middle of the aisle and stare at the two boxes of white-label pasta in each hand, attempting to calculate in their heads which one is the cheapest per noodle (my dad and grandmother being chief offenders here) all the while completely oblivious to my nasty glares because I just want to get past them so I can get to the sauce and move on.
Candy is by the registers because candy companies know impulse buys at the registers are a big factor in sales and they pay (indirectly via profit margin?) for that place.
I've been buying Horizon whole milk for awhile because the cheap milk gallons taste watered down. The price difference is large (~$5 vs ~$2.50), but the milk tastes way better.
> Horizon said the added protein comes from “organic milk protein concentrate made from high-quality complete proteins naturally found in milk”.
They are adding extra concentrate to the milk. That's why it is 12 grams of protein per cup instead of 8 grams as it comes from a cow's udder or 2.5 as it comes from a human breast.
In the United States, the dairy industry is heavily subsidized, there was a brouhaha early in the Trump administration about USA versus Canada dairy subsidies prior to the NAFTA trade deal being replaced. The cost to consumers in the USA should be higher without subsidies but who knows what all the consequences would be since this has been going on for so long.
Milk as a beverage is in decline, but milk as a product has been steadily growing as a raw material (cheese, yoghurt, etc.) The companies in trouble are those that were too concentrated in beverage milk and failed to diversify their business models to stay relevant.
Some of these companies troubles also smell badly of PE shenanigans with over leveraged debt deals and other PE card tricks.
100% this. All that being said, it's also the market working as it should in a way... poorly (in this case, borderline sociopathically) managed companies going out of business.
As someone else said, the unwinding of large consolidated food companies is largely a good thing.
The concept of perverse incentives pops up regularly on HN, and the dairy industry is a great example. You get paid by the gallon, but Bessy produces a limited number of gallons. So what do you do, you breed Bessy to the point that her milk is little more than white water, unrecognizable to previous generations of milk drinkers, and in doing so your supply outpaces demand.
The point is, the struggles of the dairy industry are entirely their own making. They ignored the potential for diversification, with loads of family farms going out of business because they wouldn't move beyond fluid milk -- same concepts of value-add and vertical integration exist in dairy just like in other businesses. Before Chobani, good luck finding "greek" yogurt. After Chobani, good luck finding anything not "greek" yogurt. But where's the Quark? Where's the Creme Fraiche? Where's the "real" greek yogurt made with sheep milk? Dairies thought they could keep producing sub-standard Holstein water and didn't need to actually think like competitive businesses.
Yep - Walmart the largest buyer of milk now owns their own farms and uses milk as a loss leader. Dean Foods former CEO was an alleged crook. Their packaging and advertising looks like it came out of the 1970s. Here we are in the Keto / Intermittent fasting era - and they failed to provide a cream. These folks gave up long ago. Expect a nice bounce back.
Indeed. Far more reasonable to lick platypus mammary "sweat".
If you think too hard about any kind of food, it can start to get weird.
Like coffee. You're taking the fruit of some tropical plant, ripping off the berry-flesh part that it wants mammals to eat, taking the seed that it wants those mammals to poop out somewhere else, killing it with heat to produce different flavor molecules, crushing it to powder, then passing hot water or steam through the powder to leach out those flavor molecules, including the molecules that the plant uses as a defense against improper eating. On top of that, adding things like the fat skimmed off the mammary secretions of other species, highly processed molecules from a temperate grass modified to produce gigantic seeds full of starch, and crystals from the juice of pulverized stems of tropical grass. This is poured into a vessel formed from huge trees pulverized down to loose cellulose fibers and molecules created using organic reactions from crude petroleum, or maybe just those organic polymers, puffed up with air.
It could be all that insane-sounding stuff, or it could just be a cup of coffee.
It is sort of cool that humans can't digest grass, but they grow grass anyway, so they can feed it to animals that can digest grass and then turn it into proteins and nutrients that humans can harvest from the animal without killing it, and which is tastier and more nutritious than raw grass juice.
A house cat has no qualms drinking cows milk when given the opportunity. I think the answer to your question reveals more about capabilities than it does about specific tastes.
These are win-win situations. Poor people get access to high quality products and businesses get a stable supply of customers and get the next generation hooked.
Unfortunately, our current leadership are idiots and prefer to hand over blank checks to companies to keep them going.
I have relatives who run dairy farms in Ontario and they have a quota system. It stabilizes the market tremendously and as a result, they can make pretty big investments on their family farm. The downside, of course, is that consumers pay more.
I wonder about that. Has anyone studied this? In general, I mean.
Sure, the retail sticker price is higher. But in my tax payer role, I also pay. If the government impairs the Freedom Markets™ with quotas and price supports, is society paying more or less over the long term? Factoring in bankruptcies, asset bubbles, crashes, unemployment, and so forth.
(Asked as someone who despises how the USA does ag subsidies.)
It's a tough thing arguing the overall a system is cheaper when my apparent cost is going up. Like the single payer debate in the USA. It seems like a no brainer to prefer a tax burden which is lower than my (and my employer's) health insurance premium.
But the optics suck, right? People will go out of their way to avoid taxes.
The invisible hand at play, specially if it is true that plant based milk are taking away market share from the milk industry. Hope the government doesn't bail out or protect the industry against what the free market demands.
> There's evidence my ancestors have been drinking milk for at least 10,000 years
Most humans can't digest lactose after infancy [1].
For those who can, we have limited research around the quantity in and frequency with which their ancestors consumed whole milk. Comparisons to modern milk, produced by stressed-out cows bred for volume and fed god-knows-what, are tenuous.
Some people die from being near peanut dust. That doesn't mean nuts are unhealthy to those who can eat them.
Even those who are included in "lactose intolerant" populations actually have no trouble chugging a huge glass of milk everyday along with some cheese and yogurt. Intolerance charts like you'd find on Wikipedia would lead you to suggest east Asians can't consume milk at all without discomfort, yet yogurt for breakfast, milk during lunch, a milk tea before dinner and ice cream after isn't even the slightest bit uncommon and causes no trouble for most people.
That some people can consume liters a day (or gallons, for those trying to gain muscle fast) seems to indicate that some people evolved to be fine with dairy.
Nutritional science has gotten a lot of things badly wrong, so it plays second fiddle to how I feel when I add or remove something from my diet. I've tried on a few occasions to cut dairy from my diet. It was sub-optimal.
I wonder how skewed this number is in the US due to doctor's notes for (un-needed) school lunch exemptions, assuming the note got charted (which is basically mandatory with electronic records). Even when I was in school, (before allergies were cool) a large number of kids faked it for access to the alternative menu, or to be allowed to bring their own lunch and snacks. I suspect it's only gotten worse.
In the overall US population peanut appears to be the most common, 58% more prevalent. In children, milk is far and away more common, 220% more prevalent, but many milk allergic children outgrow the allergy.
You're right that they should present the evidence, but "How many millions of years" isn't an especially convincing counterargument either. For most of those millions of years, mammals have been drinking strictly the milk from their species only during their infancy.
About 1/3rd of adult humans have genetic mutations to make drinking milk safe. (by coincidence most of those adults speak English). Because of that adaptation the other species argument is invalid.
dairy consumption is very strongly linked to prostate cancer: Dr. Miller gave a huge talk about this. You can find it on Youtube. Also, there's the China study, one of the largest ever studies in china showing that dairy and meat consumption are strongly linked to cancers and diseases even within a genetically homogenous population. some portions of the population had cancer rates of 400 times higher than other areas: guess what they ate? dairy/meat. they looked at over 30 factors and found the biggest factors were what people ate. there's numerous other studies as well.
drinking your own species milk is very different from drinking another mammals milk. humans didn't start drinking /eating dairy until very recently in the last couple 100K years.
> "dairy consumption is very strongly linked to prostate cancer: Dr. Miller gave a huge talk about this. You can find it on Youtube."
Who is Dr Miller. Does he present his research in medical journals, or just on YouTube? Got a link to a research paper? "Look it up on YouTube" isn't a valid response when someone asks for proof of something...
> " Also, there's the China study..."
China's a big place. Lots of studies going on, I'd imagine. Again - got a link to a research paper?
"Milk and dairy are good sources of calcium and protein which are needed as part of a healthy, balanced diet. Calcium is important for teeth and bone health.
Studies looking into the link between cancer and dairy products have not given clear results. There is evidence that dairy products could reduce the risk of bowel cancer, but we cannot say for sure that this is the case. There is no strong evidence linking dairy products to any other types of cancer. We need further research to find out more about the links between dairy products and cancer risk."
Most of the calcium you get from milk just ends up getting pissed out. they've measured this many times and found that the body doesn't even absorb most of the calcium from the milk. You can get calcium from many many many sources: nearly all the fruits and vegetables have it in abundance.
This will shock you, but It's a fact that no animal produces it's own protein. Protein gets produced in Plants, that's where it comes from. Animals get their protein from plants. If you get it from a cow through milk or eating the cow meat, your just eating 2nd hand protein. Look at all the strongest and biggest animals in the world: Apes, Gorillas, Cows, Elephants, Rhinos they all eat plants and get nearly all their protein from plants.
Milk is actually terrible for your bones. There are many studies showing that it is linked to increased bone fractures in elderly people and also linked to increased cardiovascular risk.
I know this all sounds shocking, but if you want to know the truth, you should watch "Forks over knives" or watch "What the health". both can be found on netflix.
As for "the china study" it's not some small study:
"The study they created included 367 variables, 65 counties in China, and 6,500 adults (who completed questionnaires, blood tests, etc.). “When we were done, we had more than 8,000 statistically significant associations between lifestyle, diet, and disease variables.”"
Their mother's milk, during infancy. No mammals other than humans drink milk after infancy, and humans have only been doing that for a few thousand years. I'm sure there's links to evidence I can find but I'm not going to waste my time as it's common sense.
Because the average adult doesn't need such a high concentration of fat and calories in a single drink / bowl of cereal / piece of cheese etc. If it was healthy and natural you'd be drinking your mother's milk as an adult, but I'm sure you aren't.
Where did you get that idea? Milk is one of the 2-3 most nutritious foods on Earth. In fact, milk has been designed by evolution over millions of years to be precisely what a mammal needs to thrive.
> designed by evolution over millions of years to be precisely what a mammal needs to thrive
Infant mammals. Adults consuming the milk of another species is recent. (About 10,000 years in humans.)
We have mixed evidence for the benefits of milk. It was a rich source of calories when those were scarce. Today, it might promote obesity. And good advice for some is bad advice for others. For example, milk boosts iron at the expense of vitamin D; that makes it favorable for light-skinned people at high latitudes [1].
Milk's branding as a superfood essential for kids is a product of post-war propaganda [2]. (TL; DR The U.S. government boosted dairy demand to feed soldiers. After the war, that production was threatened. So civilian demand was boosted.)
> When production is "threatened", artificially boosting demand would be the exactly wrong thing to do
There was wartime demand. Dairy farmers invested to meet it. War ends. Demand goes down. That capital must now be written off, re-purposed, or the demand re-started. We chose the last option.
Production as in productive capital or productive potential.
Some humans have the necessary genes to digest milk, some do not. Can't lump all mammals together.
> Milk contains a type of sugar called lactose, which is distinct from the sugars found in fruit and other sweet foods. When we are babies, our bodies make a special enzyme called lactase that allows us to digest the lactose in our mother’s milk. But after we are weaned in early childhood, for many people this stops. Without lactase, we cannot properly digest the lactose in milk. As a result, if an adult drinks a lot of milk they may experience flatulence, painful cramps and even diarrhoea. (It’s worth noting that in other mammals, there aren’t any lactase-persistent adults – adult cows don’t have active lactase, and neither do cats or dogs, for example).
> "Some humans have the necessary genes to digest milk, some do not. Can't lump all mammals together."
Note, adult mammals. Drinking milk as a baby is literally the definition of mammal. Even the platypus, which lays eggs and lacks teats, counts as mammal because they still produce milk to feed their children.
Cats drinking bowls of milk is a TV thing or people who don't know better. Almost all mammals, including humans, lose the ability to effectively process lactose at some point in their life. Keeping the ability to process lactose as an adult is somewhat unique to humans and even then most will stop producing lactase before they die.
Rapidly after drinking a glass of milk (or any of the many, many things that include lactose) it becomes very very clear that I am lactose intolerant to both myself and everyone around me.
We use pea milk with our kids because they're lactose intolerant. Pediatrician recommended as long as they're getting more protein and fat elsewhere in their diet (which they do). It doesn't hurt that peas don't care how they're raised and treated to produce milk.
Dairy milk is not nutritionally necessary in any age cohort. If you enjoy it, that's fine of course, but it isn't required if you don't.
Peas probably do care about these things. We just have not understood the systems yet. I think the research into Plant intelligence and sensitivity is relatively new.
I'm truly happy that you are not lactose intolerant. I know you are not intolerant because if you were, that's not a question you'd need to ask. I don't want to be crass, let's just say the symptoms are NOT ambiguous to you or people around you:
It's pretty easy to tell if you're more than just slightly lactose intolerant. The symptoms are pretty obvious and go away after a day or two of avoiding dairy.
I just think you're damaging your kids by not giving them milk, which is the most nutritious thing you can feed a kid. Also, your kids may be lactose intolerant due to other stuff in their diet, like gluten or other toxins in plant-based foods that lead to a leaky gut.
Ah of course, your robust remote medical diagnosis of "leaky gut" seems much more suitable than an actual assessment by an actual physician.
It's fine to research and make decisions about your diet which are in line with your own understanding, philosophy, and dietary requirements. Please don't pretend that your views on this are particularly useful for others.
Nobody is damaging their kids by not giving milk unless they're not giving mother's milk (or human milk). There are alternatives that may be more suitable and better than the milk of a cow or a buffalo (or some other mammal).
Things can seem to be on the rise when awareness and detection improve. For example: the number of known exoplanets grows by the day, but they existed before we knew about them.
Increase might be a better word than improve. Number of "diagnosed" cases might have gone up, but I'd argue accuracy of diagnosis has gotten much much worse.
There was a recent study showing only about 1 in 10 people who claimed to be allergic to antibiotics actually had any allergic or other negative response to them.
Realistically, it is a lot more likely that the kids are lactose intolerant (over half of humanity) than that they have celiac disease (under 1% of humanity).
Also, there's a fairly foolproof test for lactose intolerance.
I drink unflavored, unsweetened soy milk. Just two ingredients, soy beans and water. It tastes great when made properly, and is very nutritious, high protein and good fats, calcium etc
Not for hard cheeses, and they're not doing a good job mimicking the flavors, but there's some really good soft cashew cheeses these days -- and it's not very processed either.
Recently went to a plant-based pizza place. (Unknowingly.) Pizza comes out. It's a white pizza. Cashew cheese all over it.
Biting into what you think is cheese and getting cashew is disgusting. Biting into a cashew, sage and roasted pepper flatbread is quite nice.
The language around substitutes likely needs to evolve for mass adoption. (That or make it literally unrecognisably similar, e.g. what Impossible and Beyond Meat are trying to do, at which point one likely surrenders many health benefits.)
Saying "vegan X" for a complex vegan recipe intended to approach the experience of eating X seems like a naming failure when considering the sometimes heroic effort that went into researching the recipe.
Calling it "vegan cheese" is thus doubly unsuitable, as it disappoints everyone expecting something like real cheese, and denies the vegan innovator a distinctive, intrinsically vegan name for the creation.
Veganism should really be appealing for vegans first, and then the masses will appropriate from that culture whatever foods they like best from it. A "mac and vegan cheese" will never be able to outcompete mac and genuine cheese among the people who don't really care all that much if dairy cows are exploited or unhappy. But a "macaroni and cashew-butter sauce" might be fine if I'm not really in the mood for real cheese, or want to try something different.
I'm perfectly willing to try original vegan foods, but when they go head-to-head with vegan imitation against non-vegan genuine, I will choose the genuine food most of the time.
Just had mac and cheese (with cashew sauce as the cheese) at a vegan diner in Indianapolis a few days ago, couldn't tell the difference between it and the real deal. It's unlikely you're going to get away with calling cashew sauce "cheese" at scale, but when properly made it gets close.
Vegan Mac Cheese sauce is perhaps the simplistic thing to make - soak cashews overnight in fridge, drain water, add fresh water, blends, add nutritional yeast, salt, pepper, garlic, and a lemon. Heat and serve.
