Year of Publication

2017

Degree Name

Master of Science (MS)

Document Type

Master's Thesis

College

Agriculture, Food and Environment

Department

Agricultural Economics

First Advisor

Dr. Kenneth Burdine

Second Advisor

Dr. Tyler Mark

Abstract

The Southeast Order has been milk deficit for over ten years and because of this milk has to be brought in from other orders to meet processor’s demand. Transportation credits provide processors with help to cover transportation costs to bring outside milk into the order. To help keep Class I utilization and support milk prices, relative to orders in the North, Order 7 has low diversion limits. As milk produced within Order 7 has been on a downward trend, milk brought into the order has not increased as consistently. In 2000 milk pooled from farms within the order made up an average of 66% out of the total amount pooled compared to a 2012 average of 43%. The objectives of this paper are to review the history of the federal milk marketing system, describe the structure of milk pricing, examine the unique features of the southern orders, and estimate the impact of the amount of milk diverted and the amount paid in transportation credits on Order 7’s uniform price. The results showed that only Class II diverted pounds had a statistically significant impact on the uniform price.

Digital Object Identifier (DOI)

https://doi.org/10.13023/ETD.2017.083

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