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Extract: Real milk prices 15-20 percent lower than in 1983 would approximately balance production and consumption under conditions projected for the dairy industry during the remainder of the eighties. Government purchase, storage, and disposal could effectively stabilize prices near this level, but these are wasteful means of raising prices and, thereby, enhancing producers' incomes. Other programs such as direct payments, supply control, and price discrimination can transfer income to farmers at less cost to society in the short run, but can lead to serious inefficiencies over time. Changes in the marketing order program to bring prices charged to processors and paid to producers more in line with the value of the services associated with the milk would contribute to the efficiency of the industry.
These reports cover the supply, demand, and price situation every week on a regional, national, and international basis for milk, butter, cheese, and dry and fluid products.
This report is an attempt to improve understanding of the dairy sector through an analysis of the trade and economic effects of the main policy measures (subsidies) applied to the dairy sector.