by Joseph Coletti
Senior Fellow, Fiscal Studies, John Locke Foundation
If you’re on this blog, you are probably familiar with Say’s Law that “supply creates its own demand.” In its original formulation, it meant that people could only buy stuff with the income they earned from making stuff. It ignores the ability of people to change the timing of their purchases by borrowing or saving money, which means it is not a good tool for predicting market fluctuations, but the basic idea is true and valuable.
It can even be true when the stuff that gets made is actually a byproduct of making something else. With the explosive growth in demand for healthy Greek strained yogurt, there has been a similar proliferation of acid whey. Up to three ounces of acid whey are left behind in the production of a single ounce of the thick yogurt—tens of millions of gallons of the potentially toxic watery waste each year. Nobody knows what to do with it.
Some farmers are incorporating it into their cattle feed, others work it into fertilizer, and a couple are making large capital investments to generate electricity from acid whey. Let’s just hope somebody finds a good way to use all of the whey before governments regulate its production.