ADJUSTMENT MECHANISMS FOR MILK SUPPORT PRICES

James J. Miller and Lynn G. Sleight

No 277675, Staff Reports from United States Department of Agriculture, Economic Research Service

Abstract: Weaknesses of parity worsened the recent surplus of milk. A better support-price mechanism would have sent clear signals to reduce milk production. In response to a congressional mandate, this report recommends ways of improving performance of mechanisms based on price indices. Index-based mechanisms are not necessarily superior to other methods of setting support prices. However, a mechanism incorporating an appropriately weighted price index, a longrun adjustor, and shortrun flexibility could have performed much better than did parity.

Keywords: Demand and Price Analysis; Livestock Production/Industries (search for similar items in EconPapers)
Pages: 28
Date: 1985-05
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uerssr:277675

DOI: 10.22004/ag.econ.277675

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