ABSTRACT
This chapter provides an assessment of the expected impacts of bovine somatotropin (BST) adoption on regional milk prices, consumption, and production in the United States, and examines the likelihood that a reduction in farm prices of milk, as a consequence of BST adoption, will be passed on to consumers. Animal scientists have shown that BST administration will under certain conditions increase milk yields by as much as 30 to 40 percent, although more realistic projections suggest aggregate milk yield increases will probably be closer to 10 percent. The model constructed is not intended to produce projections of what farm level milk prices and quantities will actually be if BST is adopted. Some research suggests that consumers may react negatively to consumption of milk produced from cows administered BST. Adoption of BST by the nation's dairy farmers will in the long-term lead to a significant drop in farm-level milk prices and to a slight increase in quantity of milk marketed.
