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Abstract
Effects of low milk prices on U.S. dairy farms are assessed using a survey of U.S. dairy operations. Although small dairy operations were particularly vulnerable to the decline in milk prices in 2000, 41 percent of these operations were able to produce milk at a cost that was competitive with larger operations. This suggests that the managerial ability of the individual dairy producers is likely to be as important as size economies to lowering the costs of milk production.