(Continued from Page E 10)
Effects on Milk
Composition and
Consumption
Studies to date have shown BST
has little or no effect on the com
position of milk as it comes from
the cow. The Food and Drug
Administration (FDA) has already
cleared the sale of meat and milk
from BST treated cows in FDA
approved research herds. Even if
this approval is extended to all
commercially produced milk,
only a necessary, not a sufficient
condition for consumer accep
tance has been met. This author
knows of no significant study of
the probable consumer acceptance
of BST milk from the perspectives
of their preferences for natural,
safe, wholesome and healthy
foods. Milk from BST cows is
unlikely to have any physiological
effect on humans because BST is a
protein that is inactivated by the
human digestive process. Never
theless, BST could become the
object of a negative publicity
effort by some consumer group or
another, and the dairy industry
could have its hands full counter
acting such publicity. Where it
would all end is anyone’s guess at
this point, but BST itself is unlike
ly to win any new converts to milk
drinking.
The Aggregate or
Market Effects
of BST
Generally, I have argued, BST
will not be viewed much different-
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ly by dairy farmers than other
technologies have been. If farmers
think it will pay them to use it, they
will. If longer-term effects then
prove it doesn’t pay, they will stop
using it. Whether to begin and
continue the use of BST is an indi
vidual farm decision, with some
what predictable or at least
observable results. Because of the
atomistic nature of the dairy pro
ducing sector, individual dairy
farmers can continue to ignore the
effects of their decisions on mark
et quantities and prices. Changes
in market prices, of course, do not
in turn ignore individual dairy far
mers. How is BST likely to effect
market prices? More importantly,
how is BST likely to affect dairy
farm profits? The nature of
adopted technology has been to
make certain dairy farm tasks less
difficult or less distasteful (about
the only way early mechanical
bam cleaners could be justified),
or to reduce costs of production.
Most cost-reducing technology
has been output-increasing, and
this is clearly by the nature of BST.
With increased individual farm
output would come increased
market output Now, in the case of
milk, the federal government
could hold to the existing level of
price support and simply buy the
increased production in the form
of dairy products. Somehow, that
doesn’t seem to square with the
current mood of Congress or the
administration. Ultimately, the
government will allow the price
received by farmers in the market
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to decline. Aside from the possibil
ity of playing out their dislike of
BST milk in the market place by
lowering their levels of consump
tion, consumers will normally
purchase more milk and dairy pro
ducts at these lower prices, but
never enough more to keep farm
milk prices from falling. At some
point, the reduction inn prices
received will exceed the savings in
costs of production as farm level
adjustments take place. These
adjustments are likely to be the
same as they almost always have
those that result in fewer, but lar
ger dairy farms. If BST ever comes
close to living up to its promise,
the long-term on-going trend tow
ard fewer and larger farms is likely
to accelerate, but there is little rea
son to expect the industry to crash
out of control.
If and When
BST Will be
Used Commercially
Many people believe BST will
eventually be approved for general
use - and many people better
informed that I are guessing it will
happen in time for adoption some
time in 1990. Early adopters of
technology that later proves to be
sound usually benefit most from
the new technology. They get the
benefits of lower costs of produc
tion before market prices fall to
take these benefits away. This is
likely to be especially true of BST
because it will be so easy to adopt,
and the pay-off to the early adop
ters may be unusually short-lived.
Inter-farm,
Inter-regional, and
Inter-national
Comparative
Advantages
BST will benefit some adopters
more than others even for the same
date of adoption. Those with high
er levels of management skills will
probably “milk” more out of BST
technology than those with lover
levels of management skills. But
then that is true of almost all tech-
nological change, isn’t it? Some
researchers suggest higher
production cows will respond
more to BST than lower-producing
ones; others say Hide difference
can be expected. It may even be the
other way around. Almost every
one says BST won’t make good
cows and good managers out of
poor cows and poor managers,
however.
The most omprehensive study
of BST was released by the U.S.
Department of Agriculture in
October, 1987. It is tilled “BST
and the Dairy Industry, A Nation
al, Regional, and Farm-Level
Analysis, U.S. Government Print
ing Office:
1987-180-917/605586.” In this
report it is asserted that, regardless
of which of the several policy sce
narios they evaluated, BST is
expected to have little effect on the
regional location of milk
production.
Furthermore, the USDA report
’ says, the use of BST under current
international trade rules would
have little effect on U.S. competi
tiveness in the world dairy market.
If, however, a change to a freer
international trade environment
were to take place, and other coun
tries were to adopt BST while the
United States did not, U.S. dairy
farmers would be put a consider-
- i
THINKIt 9
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able disadvantage. In this connec
tion the United Kingdom did
recently approve the use of BST in
the British Isles, as the Ministry of
Agriculture there expressed the
belief that BST milk poses no risk
to human health. Australia. New
Zealand, the European Communi
ty and other countries are research
ing BST, but when any of them
may approve its use is uncertain at
this time.
Watch developments regarding
further research into the effects of
BST on milk production per cow,
its effects on the cows themselves,
and on how cows to be adminis
tered BST must be managed for
optimum results. Learn how BST
should be administered and how
all the probable costs of BST adop
tion will compare with the prob
able benefits of increased produc
tion per cow. Know when BST is
approved for use in the United
States. Then if all systems are go
for your situation, don’t procrasti
nate. Remember the early adop
ters are the ones most likely to ben
efit from adoption. The longer you
wait, the harder it will be for you to
stay competitive with your neigh
bor, with dairy farmers in other
regions, and with dairy farmers in
other countries.
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