AGES No. (AGES-9020) 84 pp

March 1990

Dairy: Background for 1990 Farm Legislation

This report address considerations in the 1990 farm bill debate for dairy, including market conditions, policy proposals, and the interactions between policy and markets for selected commodities. The U.S. dairy industry is primarily a domestic industry with both imports and exports hovering around 2 percent of U.S. milk production. After a period of relatively high dairy price supports in the late 1970s and early 1980s which distorted milk prices and generated substantial excess milk supplies, the industry spent most of the 1980s attempting to reduce dairy program purchases and Government costs. Continuing issues are the appropriate price support level, the degree of automatic price adjustment, and the proper formula or mechanism for attaining it.

Keywords: Costs and returns, dairy programs, domestic use, milk marketing orders, milk pricing, price supports, program effects, world trade

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