Report: Impact of Liberalizing Trade on US Dairy

US - A world dairy model is employed to assess the economic effects of further trade liberalization on U.S. dairy markets.
calendar icon 4 September 2006
clock icon 1 minute read

The model incorporates both vertical and spatial characteristics of dairy sectors. Among the vertical characteristics is accounting for farm milk components (fat, casein, whey protein, and lactose) in the production of many different dairy products. Important spatial aspects include the distribution of milk production and the demand for and trade of dairy products.

This report examines multilateral domestic and trade policy changes to assess how U.S. farm milk prices and production, consumer and producer surpluses, and U.S. Government revenues and dairy program expenditures respond. Empirical results from the model indicate generally modest price and production effects on U.S. milk producers when multilateral liberalization is assumed.

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