Lordship Shortage Example: New York Milk

They brought cows into the city for milk but, lacking pasture, they fed them garbage. This was an awful idea and reportedly 8000 babies died. 

This is basically what you expect with peasant management. Any time they try something new, it's going to be disastrous. They can't consistently manage to maintain the old things that work, let alone think rationally about new things. If conditions change they are going to try literally every wrong thing before they finally stumble upon something vaguely workable. This is basically why peasants breed so heartily: it's just assumed they'll get a bunch of themselves killed, so they need plenty of backups.

Because America has to assume all cows are being managed by not-lords, all milk has to be pasteurized. In other words, rather than mandating that cows not be fed garbage, it has to assume that peasants can't tell that garbage isn't food. It has to assume that peasants are going to repeatedly produce contaminated milk, because, like children, they just don't know any better. 

Likewise, it has to be assumed the buyers of this stuff can't tell garbage isn't food. Why wouldn't New Yorkers stop buying the obvious garbage milk? "Hmm, my baby is literally drunk. Maybe I should use my own milk instead of this cow milk? Naaaw." They were genuinely that dumb. Wouldn't stop even after a baby died of it - consider how the total got up to 8000 instead of capping at, like, 100 at most. "My last baby died of this milk, but what am I gonna do? What else could I possibly feed them?" Truly, it is a mystery. See also: "forced" to get vaccinated. Americans gonna Americate.

Because the system assumes the manager is a peasant, if you are a lord, it actively prevents you from applying your lordship. You can't prove your milk isn't contaminated, because it has to assume the investigator is also a peasant and either incompetent, gullible, or corrupt. If your system tries anything but simplistic checkbox bureaucracy you'll overwhelm the mental capacity of your agents. Quality milk is simply outlawed, because the system has to assume anyone who thinks they're a lord is a deluded upjumped peasant. You can't prove you're the lordly exception, because America.

Lords, wisely, respond by not attempting to make milk at all. Lacking competition from competence, animal husbandry declines further. The substandard "milk" product is the best anyone has ever known, and therefore even shoddier plastic imitations are considered middling, ref: what you can now get in plastic jugs or bags in the grocery store. 

(As previously, Americans prefer suffering, so they wouldn't buy quality milk even if they could. Ref: golden "delicious" apples, aka sour cardboard.)

Exception: the inspectors really are incompetent, gullible, and/or corrupt, so if you're a psychopathic lord, you can exploit the system by implementing a scam and forcing the system to safeguard it.
If you bought a bucket of milk from your neighbour's cow, and borrowed a chemistry lab to process it the way it is claimed milk is processed, would you get something that matches the stuff you can buy in a store? Would the owner of the chemistry lab be unable to tell which is which in a blind test? ...are you sure?

It is deeply ironic that America drinks Pasteur'd milk instead of pastured milk.