Pa. Milk production ‘booming’, says economist
UNIVERSITY PARK Penn- creating a “boom” in milk
sylvania dairy farmers are production. Their milk output has
Breeding sheep
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.increased in greater amounts and
at faster rates than anywhere else
in the Northeast, according to
Blair J. Smith, agricultural
economist at Penn State.
In 1960, 12 percent less milk was
produced than was consumed in
the state. By 1960, production was
26 percent greater than con
sumption. Smith analyzed state
and federal reports of milk
production and consumption in his
work with the Agricultural Ex
periment Station at Penn State.
“Of the Northeastern states,
only Vermont has a greater milk
surplus relative to consumer
needs,” he stated. “Vermont’s
surplus is about 2 billion pounds
annually while the surplus in
Pennsylvania is 1.75 billion
pounds.”
The Penn State economist
suggested several reasons exist for
the vigorous growth of Penn
sylvania milk production.
Closeness of dairy farmers to great
masses of people has become in
creasingly important. This is due
largely to the rapidly increasing
costs of transportation since 1973
and 1974.
In addition, soil, climate, and
topography in the Commonwealth
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leaa to a kind of dairying that is
only slightly affected by widely
fluctuating feed prices. This oc
curs since much of the feed needs
of dairy herds are produced on
home farms.
The dairy “boom” in Penn
sylvania is also seen as beneficial
to consumers. Other factors
remaining equal, more milk at the
farm tends to create lower prices
at the supermarket. Smith pointed
out that milk and dairy products
have long been an economical
source of a very important part of
human diets.
“Currently, for about 13 percent
of our food budgets, we receive
about 22 percent of our dietary
protein in the milk and dairy
products that add so much variety
to our meals,” he affirmed.
Contrary to what some people
may believe, retail prices of milk
and dairy products have gone up
less than prices of all foods
generally, it was stated. The in
crease has also been less than the
average price increases of all
consumer products taken as a
group.
Smith predicted retail milk and
dairy product prices will rise more
.State
STATE SIZE
Lancaster Farming, Saturday, August 22,1981—E9
slowly during the next several
years. He indicated this will be due
to probable future actions of the
government similar to
those taken recently.
“The primary effect of govern
ment dairy programs,” Smith
said, “has been to moderate the
wide swings in prices and
production that might otherwise
take place. Stability introduced
into the market by government
programs is important,” he
commented.
“Such stability reduces the risk
and uncertainty facing dairy
fanners and milk processors,” the
Penn State economist stated.
“With a fairly stable outlook,
farmers and processors can carry
out more highly efficient, lower
cost operations than otherwise.
Moreover, competition within the
dairy industry assures that most
cost savings are eventually passed
along to the consumer,” he con
cluded.
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