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Although per capita fluid milk consumption in the United States has been declining, production and consumption of manufactured dairy products are on the rise. Growth in the Greek-style yogurt market can be attributed to growth in production and consumption of manufactured dairy products. Rapid growth in Greek-style yogurts could create both opportunities and problems for dairy-product consumers, producers, and marketers. This paper investigates the growth of Greek-style yogurt market in the United States focusing on quantifying implications on consumer demand and dairy farmer welfare as it relates to economic efficiency and product availability. The objectives are to (a) estimate economic and demographic factors affecting U.S. demand for Greek-style yogurt, and (b) investigate the economic ramifications on U.S milk producers in the event that demand for Greek-style yogurt continues to grow as well as if over-capacity occurs, and leads to declines in the Greek-style yogurt price, the overall welfare of dairy farmers Cutting-edge methodologies in censored demand modeling and calculation of farm-level welfare effects are used. This work will help set appropriate policies at consumer, producer and marketer level pertaining to Greek-style yogurts in the United States, and thereby contributing to long-range improvement and sustainability of U.S. agricultural and food systems.


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