Escalating media advertising costs have prompted shifts away from advertising to non-advertising promotion activities in the dairy industry’s generic commodity promotion program. As advertising budgets become tighter, determining the optimal allocation of these funds becomes particularly important. Optimal seasonal generic advertising expenditure shares for the national fluid milk and cheese generic advertising programs were estimated, with shares higher in the first and fourth quarters for fluid milk and relatively even across quarters for cheese. Estimates of producer welfare gains from re-allocation were substantial, with average welfare gains of 12 to 24 percent of annual advertising investments.


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