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Evaluating the Economic Impacts of Regional Milk Pricing Authorities: The Case of Dairy Compacts

Published online by Cambridge University Press:  15 September 2016

Kenneth W. Bailey
Kenneth W. Bailey*
Affiliation:
Department of Agricultural Economics and Rural Sociology at The Pennsylvania State University
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Abstract

Congress consented to the creation of the Northeast Interstate Dairy Compact in the 1996 Federal Agriculture Improvement and Reform Act. Interest is now growing in expanding this compact and creating new multi-regional dairy compacts. Dairy compacts provide a floor for Class I fluid prices and thus stabilize and enhance farm milk prices in compact regions. This analysis indicates that multi-regional dairy compacts will result in clear economic tradeoffs between dairy farmers, processors, retailers, and consumers. While dairy farmers within the compact region may economically benefit from higher farm milk prices, processors, retailers and consumers in the compact region and dairy farmers outside the compact region will face economic losses.

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Articles
Information
Agricultural and Resource Economics Review , Volume 29 , Issue 2 , October 2000 , pp. 208 - 219
Copyright
Copyright © 2000 Northeastern Agricultural and Resource Economics Association 

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