| There is continuing pressure by various farm groups to attempt to solve the chronic problems in the U.S. dairy industry represented by increased milk price variability, inability to generate positive returns at the farm level, increasing role of dairy exports as an important market for U.S. dairy products, etc. As such it is important for analysts and policy makers obtain an estimate as to how responsive dairy producers are to changing economic and technological conditions. Examples of previous research used to examine supply response in the U.S. dairy sector include LaFrance and deGorter (1985), Chavas and Klemme (1986), Thraen and Hammond (1987), Chavas, Krauss and Jesse (1990), Chavas and Krauss (1990), Yavuz, et al, (1996) and USDA (2007). These... |
