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Potential Economic Impacts of the Northeast Interstate Dairy Compact on Vermont Dairy Farms

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  • Wackernagel, Rick

Abstract

The Northeast Interstate Dairy Compact has been established to regulate milk prices. Simulation models show impacts on Vermont farms of alternative milk prices and accelerated productivity growth. Enhancing prices (by $0.85/cwt) improves financial performance the most, while impacts of doubling growth in milk production/cow (to 2.6% per year) and setting a price floor (which reduces the standard deviation of the price by 19% and raises prices $0.12/cwt) are substantially smaller. These impacts are inversely related to farm profitability. However, impacts on larger farms are not proportionately larger than those on smaller farms. Reducing price variability has smaller impacts than the $0.12/cwt price increase.

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  • Wackernagel, Rick, 1998. "Potential Economic Impacts of the Northeast Interstate Dairy Compact on Vermont Dairy Farms," Agricultural and Resource Economics Review, Cambridge University Press, vol. 27(1), pages 53-62, April.
    • Handle: RePEc:cup:agrerw:v:27:y:1998:i:01:p:53-62_00
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    Cited by:

    1. Joseph V. Balagtas & Daniel A. Sumner, 2003. "The Effect of the Northeast Dairy Compact on Producers and Consumers, with Implications of Compact Contagion," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(1), pages 123-144.
    2. Dhar, Tirtha Pratim & Cotterill, Ronald W., 2002. "Two-Stage Oligopoly Pricing With Differentiated Product: The Boston Fluid Milk Market," 2002 Annual meeting, July 28-31, Long Beach, CA 19872, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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