Agricultural Economic Report No. (AER-705) 54 pp

April 1995

Dairy: Background for 1995 Farm Legislation

This report address considerations in the 1995 farm bill debate for dairy, including market conditions, policy proposals, trade agreements, and the interactions between policy and markets for selected commodities. The U.S. dairy industry is heavily influenced by public dairy policies and programs. The 1980s were marked by attempts to reduce government program costs by adjusting dairy price supports and initiating voluntary supply control measures. So far the same trends have continued into the 1990s. General issues of concern for the industry include: structural change in milk production, surplus production, international trade issues, and price policies. A key issue for legislators in 1995 will be price volatility in milk and dairy product markets.

Keywords: dairy, domestic use, industry structure, international dairy trade, milk marketing orders, milk pricing, price support, production costs and returns, program effects

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