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Efficiency Considerations in Butterfat Differential and Component Pricing of Milk
Author(s) -
Jacobson Robert E.,
Walker Francis E.
Publication year - 1973
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1238440
Subject(s) - butterfat , component (thermodynamics) , value (mathematics) , measure (data warehouse) , payment , differential (mechanical device) , economics , milk fat , food science , mathematics , chemistry , thermodynamics , computer science , statistics , finance , physics , linseed oil , database
Producer prices for milk generally reflect only differences in butterfat content as an explicit measure of value. This paper demonstrates that such a pricing system results in inequitable payments to producers. A component pricing approach that includes component values is then suggested.