Files
Abstract
This report examines the responsiveness of fluid milk sales to milk advertising in the New York
City, Albany, Syracuse, Rochester, and Buffalo markets. Fluid milk demand equations for New
York City, Albany, Syracuse, Rochester, and Buffalo were estimated with monthly data from
1986-2000, which included generic milk advertising expenditures Generic milk advertising had a
positive impact on milk sales in all markets, and was statistically significant in three out of the five
markets. The model was then simulated to determine the impact of the New York state portion
of advertising expenditures on producer milk prices and returns. A benefit-cost ratio was also
computed for each market, and the weighted average for New York state was equal to 2.12
indicating that every dollar invested into New York state generic milk advertising returned $2.12
back in extra Class I revenue to farmers.