Friday, May 9, 2008

Happy Cows and Bullshit

Seen the Happy Cow Commercials? Happy cows may create better cheese, but the ads seem to imply (no, state) that happy cows come from California, mainly because it's so much warmer on average than it is in Wisconsin (doncha-no?). Don't be fooled!

Numerous studies show that cows are happy at much lower temperatures than humans are. Ideal temperatures for cows in terms of comfort and milk output range in the 50's (the range strictly for milk output is 41-77 according to some studies like this one). Cows are much more burdened by hotter temperatures in terms of comfort because they expend a lot more energy digesting their food than humans (or even cats or dogs), which creates a lot of heat. Cows in temperatures above 80 degrees Fahrenheit produced around 25-30% less milk than cows in much cooler temperatures. On the low end of the scale it seems that the main concern for conditions that really hurts the cows and their productivity are: (1) wind, and; (2) teat frostbite (usually isn't a problem until temperatures drop below single-digits).

Better yet, this is a great example of comparative advantage. Even if cows in Collie-fornya are more productive in the absolute sense, it seems that Wisconsin or Vermont or Ohio would be better-suited for dairies anyway, on the basis of the basic Ricardian model of trade. If California and Wisconsin can both produce either wine or cheese, and California's land and labor resources are better-suited for both, that wouldn't mean that California would ideally end up producing both, or that Wisconsin would produce neither. Even if we concede the point that Cows like warmer climes (which is not clear cut at all), then we would still be better off if California did not try to promote and export its cheese, because there are higher returns for them in the wine sector. In other words, grapes are pickier about cold weather than cows are. And there you have a big bright example of comparative advantage at work.

Have a good summer, kids.

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