Segmenting the Milk Market into bST-Produced and Non-bST-Produced Milk

This paper discusses the value to milk producers and consumers of segmenting the milk market into bST-produced milk and non-bST-produced milk markets, versus losing milk consumption from consumers who will not consume bST-produced milk. Results indicate that both bST-using producers and non-bST-using producers benefit from a segmented market when compared to losing milk markets. Even if market loss does not occur, segmenting the market benefits producers not able to effectively use b~T and may even benefit bST users if the use of bST significantly shifts the supply curve for milk. Non-bST consuming consumers benefit from the availability of non-bST milk, and consumers who are indifferent to the use of bST pay about the same price in a segmented market.

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Working or Discussion Paper
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SP 93-02

 Record created 2017-04-01, last modified 2019-08-30

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