Journal of Agricultural and Applied Economics, 29,2(December 1997):303-313 0 1997 Southern Agricultural Economics Association Impact of National Generic Dairy Advertising on Dairy Markets, 1984–95

The impacts of generic dairy advertising on retail, wholesale, and farm dairy markets are estimated in this study at the national level. The results indicate that generic dairy adver-tising had a major impact on retail, wholesale, and farm markets for the dairy industry. The main conclusion of the study is that farmers are receiving a high return on their investment in generic dairy advertising, i.e., an average rate of return of $3,40 for every dollar invested over the period 1984–95. Moreover, the return on investment in advertising was higher in the most recent year, almost double the average for the previous 11 years. Key Words: dairy, generic advertising, industry econometric model, simulation. Dairy farmers pay a mandatory assessment of 1S @ per hundred pounds of milk marketed in the continental United States to fund a national demand expansion program. The aims of this program are to increase consumer demand for milk and dairy products, enhance dairy farm revenue, and reduce the amount of surplus milk purchased by the government under the Dairy Price Support Program. Legislative au-thority for these assessments, which exceed $200 million annually, is contained in th