The Food and Agricultural Policy Simulator: The Dairy-Sector Submodel

This article presents the structure, parameters, and validation statistics for the dairy-sector sub-model contained in the U S Department of Agriculture's (USDA's) Food and Agricultural Policy Simulator (FAPSIM) This submodel endogenously estimates dairy cow numbers, milk production farm-level milk prices, fluid milk consumption, and the supply, utilization, and prices of butter, cheese, nonfat dry milk, condensed and evaporated milk, and frozen milk products It also endogenously estimates USDA purchases of manufactured dairy products and the costs of Government dairy product purchases under alternative dairy price-support options The annual model is used to examine the adjustment resulting from lowering dairy price-supports from 75 to 65 percent of the parit