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Measuring the Impacts of Generic Fluid Milk and Dairy Marketing

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  • Kaiser, Harry M.

Abstract

While per capita fluid milk consumption has been declining for decades in the United States, generic fluid milk marketing activities sponsored by fluid milk processors and dairy farmers have helped mitigate some of this decline. We estimate that these marketing efforts have had a positive and statistically significant impact on per capita fluid milk consumption. Specifically, over the 11-year period 1995 through 2005, we estimate that a one-percent increase in generic fluid milk marketing expenditures resulted in a 0.051 percent increase in per capita fluid milk consumption when holding all other demand factors constant. What about the impact on total consumption of fluid milk? From 2001 through 2005, generic fluid milk marketing activities increased fluid milk commercial disappearance by 22.5 billion pounds in total or 4.5 billion pounds per year. Put differently, had there not been generic fluid milk marketing conducted by the two national programs, fluid milk consumption would have been 8.2 percent less than it actually was over this time period. Hence, the bottom line is that the combined efforts of dairy farmers and fluid milk processors to market fluid milk have had a positive and statistically significant impact by partially mitigating declines in fluid milk consumption. In terms of the total dairy demand analysis, the average generic dairy marketing elasticity for the period 1990 through 2005 was 0.074; i.e., a one-percent increase in expenditures for these marketing activities would increase per capita dairy demand by 0.074 percent. Thus, the total marketing effort by dairy farmers and milk processors has had a positive and statistically significant impact on dairy consumption. We calculated a benefit-cost ratio (BCR) for the Dairy Program for the period 2000 through 2005. The benefits of the Dairy Program were calculated as the change in dairy farmers’ net revenue due to demand enhancement from all marketing activities under the Dairy Program. The costs o
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Suggested Citation

  • Kaiser, Harry M., 2010. "Measuring the Impacts of Generic Fluid Milk and Dairy Marketing," Research Bulletins 186946, Cornell University, Department of Applied Economics and Management.
    • Handle: RePEc:ags:cudarb:186946
    DOI: 10.22004/ag.econ.186946
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    Cited by:

    1. Stewart, Hayden & Dong, Diansheng & Carlson, Andrea, 2012. "Is Generational Change Contributing to the Decline in Fluid Milk Consumption?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 37(3), pages 1-20.
    2. Nicholson, Charles F. & Kaiser, Harry M., 2008. "Dynamic market impacts of generic dairy advertising," Journal of Business Research, Elsevier, vol. 61(11), pages 1125-1135, November.
    3. Stewart, Hayden & Dong, Diansheng & Carlson, Andrea, 2013. "Why Are Americans Consuming Less Fluid Milk? A Look at Generational Differences in Intake Frequency," Economic Research Report 262223, United States Department of Agriculture, Economic Research Service.

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    Keywords

    Livestock Production/Industries; Marketing;

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