Coffee served at Starbucks Corp. (NASDAQ: SBUX) locations in the American West and Northeast will
soon lack a certain something -- no, it's not caffeine, thank God! -- but you won't be able to detect the loss by taste. That something will be recombinant bovine growth hormone (rBGH), a Monsanto (NYSE: MON) product. The hormone is given to about a third of the country's dairy herd in order to increase per-cow milk production.
Seattlepi.com quotes a spokesman of the Washington Dairy Products Commission as saying that
the move will increase production costs for the farmers, which will be passed along to Starbucks, thereby putting pressure on drink prices. In the same report, Starbucks spokesman Sanja Gould states that this is the first phase of a nationwide program to eliminate rBGH at all Starbucks.
Monsanto markets rBGH, the top-selling dairy herd drug, under the name Posilac. Advocacy
groups have suggested a link between rBGH and cancer in humans, although studies have not proven such. Nonetheless, many consumers prefer to avoid milk produced with the drug, which is no doubt the driving factor in Starbucks' decision.
Monsanto has
compiled a number of articles supporting their claim that Posilac is a safe product of vital importance to the milk industry. The implication of the cited articles is that the Starbucks decision is market-driven, by a market convinced of a health threat that doesn't exist.
In 2005, several Chinese entrepreneurs started a milk production company, Modern Dairy. No doubt, the company realized there was a huge opportunity in China for milk (right now, the country is third in the world in terms of production). 