ABSTRACT
Performance in the dairy sector has placed stress on all current dairy policies and programs, especially the price-support program. 1 Milk production has increased 13 5 percent since 1979, while commercial disappearance has increased only 2.2 percent (Table 1). As a result, the U.S. Department of Agriculture (USDA) purchases of dairy products under the price-support program have reached record levels (Table 2). In the fiscal year 1983, the USDA purchased the equivalent of 16.6 billion pounds of milk or 12.1 percent of all milk marketed. The net expenditures for dairy programs reached $2.6 billion. Some improvement in the production-consumption balance is expected during the fiscal years 1984 and 1985, partly as a result of the Dairy and Tobacco Adjustment Act of 1983- Government purchases may drop to 12 billion pounds and cost less than $2 billion during the fiscal year 1984 and may drop to about 8 billion pounds at a cost of about $1 billion in the fiscal year 1985. These levels of purchases are high by historic standards and are no likely to relieve the pressure to make changes in dairy programs at the time the 1985 farm bill is drafted. U. S. Dairy Production, Consumption, and Prices, 1970–1983 https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">
Milk prices b
Retail dairy price index c
Year
Production
Consumption a
All
Grade B
billion pounds
dollars per hundredweight
1970
117.0
110.8
5.71
4.70
111.8
1971
118.6
111.0
5.87
4.86
115.3
1972
120.0
113.2
6.07
5.08
117.1
1973
115.5
113.2
7.14
6.20
127.9
1974
115.6
113.7
8.33
7.13
151.9
1975
115.3
114.2
8.75
7.63
156.6
1976
120.2
117.2
9.66
8.56
169.3
1977
122.7
116.2
9.72
8.70
173.9
1978
121.5
118.8
10.58
9.65
185.6
1979
123.4
120.2
12.03
11.09
207.1
1980
128.5
119.2
13.05
12.05
227.4
1981
133.0
120.5
13.76
12.73
243.6
1982
135.8
122.4
13.59
12.66
247.0
1983
140.0
122.8
13.56 d
12.62 d
249.9
Domestic disappearance from commercial sources.
Prices per hundred weight at average fat test.
Price index for all dairy products, 1967 = 100.
Preliminary.
Source: U. S. Economic Research Service (various issues). U. S. Department of Agriculture Removals and Net Expenditures for Dairy Products, Fiscal Years, 1969–1982 https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">Removals a
Year
Milk equivalent billion pounds
Share of marketings percent
Total net expenditure billion dollars
billion pounds
percent
billion dollars
1969–70
4.4
4.4
393.8
1970–71
7.2
6.6
513.6
1971–72
6.6
5.9
431.8
1972–73
5.0
4.5
243.6
1973–74
0.7
0.7
121.1
1974–75
2.4
2.2
619.0
1975–76
0.9
0.9
290.5
1976–77
3.4
2.9
824.0
1977–78
3.2
2.9
589.2
1978–79
1.1
1.0
384.7
1979–80
8.2
6.6
1,436.6
1980–81
12.7
9.9
2,093.5
1981–82
13.8
10.5
2,267.3
1982—83 c
16.6
12.1
2,620.5
Based on milk fat.
b Total expenditures for support program, school lunch and food aid, export assistance, and special milk program.
Preliminary.
Source: U. S. Economic Research Service (January, 1984).