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The Value of Segmenting the Milk Market into bST-Produced and Non-bST-Produced Milk

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  • Tauer, Loren W.

Abstract

This article discusses the value to milk producers and consumers of segmenting the milk market into bovine Somatotropin- (bST) produced milk and non-bST-produced milk markets, versus losing milk consumption from consumers who will not consume bST-produced milk. Results indicate that both bST-using producers and non-bST-using producers benefit from a segmented market when compared to losing milk markets. Even if market loss does not occur, segmenting the market benefits producers not able to effectively use bST, and may even benefit bST users if the use of bST significantly shifts the supply curve for milk. Non-bST-consuming consumers benefit from the availability of non-bST milk, and consumers who are indifferent to the use of bST pay about the same price in a segmented market.
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Suggested Citation

  • Tauer, Loren W., 1992. "The Value of Segmenting the Milk Market into bST-Produced and Non-bST-Produced Milk," Working Papers 128119, Cornell University, Department of Applied Economics and Management.
    • Handle: RePEc:ags:cudawp:128119
    DOI: 10.22004/ag.econ.128119
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    1. is not listed on IDEAS
    2. Lohr, Luanne, "undated". "Welfare Effects of Eco-label Proliferation: Too Much of a Good Thing?," New Economic Approaches to Consumer Welfare and Nutrition - FAMC 1999 Conference 260297, Food and Agricultural Marketing Consortium (FAMC).
    3. Jau-Rong Li & Dawn D. Thilmany, 1998. "Branded pork consumption in Taiwan: Analysis of market and product choice," Agribusiness, John Wiley & Sons, Ltd., vol. 14(2), pages 127-138.
    4. David Smith & J. Skalnik & Patricia Skalnik, 1997. "The bST debate: The relationship between awareness and acceptance of technological advances," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 14(1), pages 59-66, March.
    5. Lohr, Luanne & Krissoff, Barry, 2001. "Consumer Effects Of Harmonizing International Standards For Trade In Organic Foods," Faculty Series 16726, University of Georgia, Department of Agricultural and Applied Economics.

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