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Implications of Raising the Nonfat Solids Standards for Beverage Milk

Published online by Cambridge University Press:  28 April 2015

Larry Salathe  and
J. Michael Price
Larry Salathe
Affiliation:
U.S. Department of Agriculture
J. Michael Price
Affiliation:
U.S. Department of Agriculture
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Abstract

An econometric model of the dairy industry was used to estimate the effects on farmers, consumers, and taxpayers of nationwide adoption of the California nonfat solids standards for fluid milk. It was estimated that adoption of the California standards would raise farm-level milk prices by 1 to 5 percent in the short run and by 1 to 2 percent in the long run. The average retail price of fluid milk would rise by 9 to 13 cents per gallon. Dairy program costs fall under most scenarios, but could rise if surpluses fall to levels that would trigger increases in the support price.

Keywords

California standardsconsumersfluid milkfarm incomemilk pricesnonfat solidstaxpayer costs
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 24 , Issue 2 , December 1992 , pp. 197 - 209
Copyright
Copyright © Southern Agricultural Economics Association 1992

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References

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