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Abstract
Dairy policy under the 2014 farm bill is an insurance program based on national milk and feed prices, despite considerable regional variation in feed costs and milk prices. Milk production response to low margin periods between 2000 and 2012 is compared by region. Consistent with prior research, the response is much greater in the West. There is no evidence that eastern and mid-western dairies reduce production in response to low margins. Implications for potential total and regional government expenditures for the Dairy Margin Protection Program are evaluated in the context of historical supply response and 2015 participation rates.