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Impact of Bovine Somatotropin on U.S. Dairy Markets under Alternative Policy Options
Author(s) -
Kaiser Harry M.,
Tauer Loren W.
Publication year - 1989
Publication title -
applied economic perspectives and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.4
H-Index - 49
eISSN - 2040-5804
pISSN - 2040-5790
DOI - 10.1093/aepp/11.1.59
Subject(s) - price support , government (linguistics) , bovine somatotropin , agricultural economics , economics , product (mathematics) , business , dairy industry , agricultural science , microeconomics , production (economics) , environmental science , growth hormone , linguistics , philosophy , biochemistry , chemistry , geometry , mathematics , food science , hormone
The annual market impacts of bovine Somatotropin on the U.S. dairy sector are simulated under four dairy policy scenarios for 1988–2000. The scenarios include freezing the support price at its predicted 1990 level ($10.60) for 1990–2000, adjusting the support price annually to keep annual government purchases of dairy products between 2.5 and 5 billion pounds, using annual cow removals to maintain support program purchases under 5 billion pounds, and using a combination of support price changes and annual cow removals. Annual equilibrium values for supply, demand and prices are generated for the farm sector and fluid and manufactured dairy product retail markets. Estimates of government purchases of dairy products and government costs for each year are reported. The results suggest that a combination of support price changes and cow removals is the most attractive policy in terms of government costs and producer profits.