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The Effects of Federal Milk Orders on the Economic Performance of U.S. Milk Markets
Author(s) -
Dobson W. D.,
Salathe Larry E.
Publication year - 1979
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 - 10.2307/1239726
Subject(s) - order (exchange) , agricultural economics , milk production , agriculture , production (economics) , economics , agricultural science , business , zoology , microeconomics , geography , biology , finance , archaeology
Class I price differentials maintained by the U.S. Department of Agriculture and producers during 1965–75 generated Grade A milk supplies in excess of fluid needs and reserves for the federal order system. As required by specified norms, USDA has adopted federal milk order provisions which reduce pronounced seasonality of milk production and lessen certain types of erratic and extreme price variation. If federal milk orders were eliminated and cooperatives and state agencies were barred from replacing the orders, then fluid milk markets characterized by lower Class I differentials, greater milk price variability, and smaller Grade A milk surpluses might emerge.