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Milk Cost of Production Estimates for October, November, and December 2012

Listed author(s):
  • Adam Rabinowitz


    (University of Connecticut)

  • Rigoberto A. Lopez


    (University of Connecticut)

Connecticut Public Act 09-229 authorizes payments to farmers based on a monthly cost of production (COP) estimate and a federal market order one sustainable uniform price. Since the inception of this act the Connecticut Department of Agriculture used USDA ARMS survey data for Vermont to determine the applicable payments to dairy farmers because a Connecticut specific COP did not exist. In December 2012, the Zwick Center for Food and Resource Policy published the first Connecticut specific raw milk COP estimate based on survey data from 2011. This process was undertaken to aid the Commissioner of Agriculture in the application of Connecticut Public Act 09-229 by moving to an estimate that more accurately portrays the costs faced by Connecticut dairy farms. The release of the 2012 report includes both an annual 2011 estimate as well as monthly estimates for January through September 2012. The 2011 annual COP in Connecticut was $31.52/cwt, which was slightly lower than Vermont ($32.61/cwt) yet representative of the state dairy farms. With a new baseline estimate the current task is to use the new Connecticut annual COP to compute fourth quarter (October – December) 2012 monthly COP estimates. This process amends the methodology that computed quarterly COP updates for Vermont and Maine during 2011 and 2012. The methodology now uses the Connecticut baseline, the UConn Modified Dairy Farm Management Business Summary (DFBS) Method, and monthly indices provided by the National Agricultural Statistics Service (NASS).

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Paper provided by University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy in its series Outreach Reports with number 13.

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Length: 5 pages
Date of creation: Feb 2013
Handle: RePEc:zwi:outrep:13
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