Abstract
In the United States, over 70% of milk production is priced under Federal Milk Marketing Orders (FMMOs). A primary purpose of FMMOs is to facilitate orderly allocation of milk as a limited, perishable resource among alternative uses. Fundamental to FMMOs are the regulatory prices applicable to milk used in cheese and whey (Class III), and nonfat dry milk and butter (Class IV). This work examines a novel milk pricing method based on the concept of opportunity cost for milk used in cheese and whey. This novel method may improve the functioning of FMMOs and the U.S. dairy industry.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 606-620 |
| Number of pages | 15 |
| Journal | Journal of Agricultural and Applied Economics |
| Volume | 54 |
| Issue number | 4 |
| DOIs | |
| State | Published - Nov 27 2022 |
Bibliographical note
Publisher Copyright:© The Author(s), 2022. Published by Cambridge University Press on behalf of the Southern Agricultural Economics Association.
Keywords
- butter
- cheese
- dry whey
- milk
- nonfat dry milk
- opportunity cost
- price
- protein