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Rising consumer incomes and declining prices for dairy products relative to other foods caused most of the 2-percent average annual increase in per capita consumption posted from 1983 through 1986. Advertising, concern about health and nutrition, changes in demographics, and Government donations also affected consumption. But these influences were small for most dairy products, compared with the effects of changes in relative prices and consumer incomes. With the exception of cheese and lowfat milk, per capita consumption of dairy products in the United States either trended downward or stagnated for the two decades prior to the early 1980’s. Per capita consumption turned up, however, in the early 1980’s. Consumption of items such as lowfat milk and cheese showed further gains, and consumption of most other dairy products bottomed out or increased modestly. This report examines dairy market characteristics, the product composition of 1983-86 consumption increases, price and income effects on demand, and other factors affecting demand


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