Author ORCID Identifier

Date Available


Year of Publication


Degree Name

Master of Science (MS)

Document Type

Master's Thesis


Agriculture, Food and Environment


Agricultural Economics

First Advisor

Dr. Timothy A. Woods

Second Advisor

Dr. Shuoli Zhao


Many medium and smaller dairies are shifting to various kinds of value-added products that may expand in demand nationally aside from fluid milk. This study uses a latent class logit model to investigate the heterogeneity of consumer preferences and willingness to pay for dairy value-added products across four latent classes considering different local and environmental sustainability labels. The dairy products examined for this research are butter, cheese, yogurt, and ice cream. This research revealed that younger consumers, especially those that reside in rural areas, always pay attention to product attributes when they shop for dairy products, mostly the local state brand (Kentucky Proud) and climate-smart labels. Most respondents defined local food products as food produced within the same state. Results show that cheese and butter are the most consumed dairy products across all four dairy products. The result from the latent class logit model shows that across all four classes, consumers had the highest willingness to pay for labels with low carbon levels ($1) and medium carbon levels ($0.52) compared to labels with high carbon levels. There was a low willingness to pay for the Kentucky milk label ($-0.44) and 100 miles label (-0.93), as most prefer the Kentucky Proud label. The results from this research are critical for product development and marketing strategies for small and medium-scale dairy farmers. It will also contribute to knowledge for efficient market segmentation strategies for farmers, retailers, and policymakers.

Digital Object Identifier (DOI)

Funding Information

This study was supported by the U.S. Department of Agriculture’s (USDA) Agricultural Marketing Service (AMS) through grant 21DB1TN1005 in 2021.

The fund title is - Southeast Dairy Business Innovation Initiative.

The funding was allocated for 2 years.