ITHACA, N.Y. - The com
petitive position of the dairy in
dustry in the Northeast will depend
heavily on the use of new products
created through modern
biotechnology, says a Cornell
University agricultural economist.
Robert J. Kalter, professor and
chairman of Cornell’s Department
of Agricultural Economics, says
that research has led to new
biotechnology products, such as
bovine grown hormone, that will
cut production costs substantially
for dairy farmers.
“Quick adoption of
biotechnology products by the
dairy industry will give it a
competitive advantage over other
food sources,” he stresses.
Kalter made that prediction in a
talk at a recent seminar
on“ Agricultural Research Policy”
held under the sponsorship of the
University of Minnesota. Kalter is
a faculty member of the New York
State College of Agriculture and
Life Sciences at Cornell.
Milk and other dairy productrs,
he said, are in constant com
petition for the consumer dollar
with non-dairy beverages and food
items.
“Fruit juices, soft drinks, coffee,
and non-dairy snacks are all
alternatives that consumers
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Biotechnology is
consider buying each time they
enter the supermarket,” Kalter
pointed out. “Therefore, dairy
farmers will need to adopt cost
reducing technology to stay
competitive with other products
produced by the food system.”
Citing such a competition now
taking place between the red meat
and poultry industries as an ex
cellent example, Kalter said,
“Increased efficiency in poultry
production has resulted in lower
consumer prices, and the market
has seen a major displacement of
red meat from the consumrr’s food
basket.”
Per capita red meat con
sumption continued to decline in
1984, while poultry and fish con
tinued to make relative gains in
American diets. Poultry showed
the greatest gain up 74 percent
since 1964, Kalter noted. In 1984,
red meat consumption was near its
1964 level, but eggs were down 18
percent. Fish consumption has
gained rapidly since 1982.
A similar situation, he said, took
place in the late 1950 s when
margarine began seriously af
fecting butter consumption.
Early adoption of biotechnology
products, Kalter contended, will
help dairy farmers in the Northest
and Midwest to remain com
petitive against large dairy
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“Biotechnology offers major
benefits to all dairy farmers by
improving production efficiency,”
Kalter emphasized. “It is of
particular interest to small- and
medium-sized operations because
it is not a capital intensive in
novation, compared to many
technological advances made in
the past.”
“As a result, small operators
will be financially able to adopt
new biotechnology products
without incurring large
debts,’’Kalter explains. “The
principle ingredient for successful
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hormone will be management
ability.”
Called “bovine somatotropin,”
the growth hormone is a product
made through genetically
engineered microorganisms.
Considered a major research
breakthrough, the growth hormone
technology has the potential for an
unprecedented increase in the
efficiency of dairy production; it
requires fewer animals and less
total feed to produce the same
quantity of milk.
Although biotechnology will cut
production costs by boosting ef
ficiency, the current milk surplus,
Kalter argued, is not the result of
adopting new technology, but
rather is directly linked to
government price support
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programs for milk.
Efforts to restore a free market
system to the dairy industry m
terms of bringing supply and
demand into balance will result in
fewer dairy animals and a
reduction in' farm operators, he
said.
“However, adoption of cost
reducing technologies will be in
strumental in increasing con
sumption of dairy products by
lowering consumer prices,” Kalter
stressed. “Hence, the problem of
overproduction will be reduced.”
“Continued market pressure
resulting from consumer demand
and preferences will spur efforts to
develop more efficient production
techniques essential to the survival
of the dairy industry,” Kalter
concluded.
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