Cornell analyzes Growth Management Plan

June 14, 2009 07:00 PM
Cornell University dairy economists Charles Nicholson and Mark Stephenson have analyzed the Growth Management Plan (GMP), finding that the plan could reduce price volatility while offering higher average milk prices. 
The GMP has been endorsed by California's Milk Producer Council and the Holstein Association.
At the same time, the economists say a whole host of questions remain unanswered, including regional effects, farm size impacts, processor impacts, dairy import and export questions and consumer demand issues resulting from higher prices. Also left unresolved were questions regarding cattle and land prices if the GMP was used not only to mitigate volatility but enhance milk prices as well.
The economists ran through a number of scenarios, including a feed price shock, a world demand shock and a combination of the two. In all cases, the GMP plan was able to bring milk prices up more quickly than the current system. Average annual milk prices were also $1 to $2/cwt  or more.

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