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The Effects of Alternative Seasonal Price Differentials on Milk Production in New York

Published online by Cambridge University Press:  10 May 2017

Harry M. Kaiser ,
Pascal A. Oltenacu  and
Terry R. Smith
Harry M. Kaiser
Affiliation:
Department of Agricultural Economics, Cornell University
Pascal A. Oltenacu
Affiliation:
Department of Animal Science, Cornell University
Terry R. Smith
Affiliation:
Department of Animal Science, Cornell University
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Abstract

Uneven monthly milk production (seasonality) is a major problem to the New York dairy industry. This article estimates expected monthly milk production response to a set of hypothetical seasonal price differentials designed to reduce the degree of seasonality. The analysis is based on a random mail survey and farm record data. The results indicate that a seasonal price differential of $1.12 per cwt. (over three times the current differential) would be necessary to completely balance spring and fall production in New York, based on the perceptions of farmers surveyed. Also, producers with better managerial skills are shown to be able to reduce their seasonality at a significantly lower price differential than less skilled farm managers.

Type
Articles
Information
Northeastern Journal of Agricultural and Resource Economics , Volume 17 , Issue 1 , April 1988 , pp. 46 - 55
Copyright
Copyright © 1988 Northeastern Agricultural and Resource Economics Association 

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Footnotes

The authors would like to thank Walter Wasserman and the staff at the New York-New Jersey federal milk marketing order for their valuable assistance and suggestions at all stages of this research and three anonymous reviewers for their useful comments on this article. Primary funding for this research was provided by a research and development grant from the New York Department of Agriculture and Markets. Additional support was provided by Agway Inc., Dairylea Cooperative, and Eastern Milk Producers Cooperative Association Inc.

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