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Interregional Competition in Dairying Studied with an Electric Brain¹

Agricultural Economics Department, Purdue University West Lafayette, Indiana

ABSTRACT

Many vital economic questions of the farm hinge upon the competitive relationship between one region of the country and another. Certainly, the current major questions in dairy economics arise in this economic atmosphere. For instance, what is the future of dairying in the South? Where would a successful fresh powder or concentrate be produced? How much will cheap commercial nitrogen reduce dairying in the Corn Belt? How big should a federal marketing order be? How far will the plant mergers go?

Interregional competition studies have plagued dairy economists. Everyone has known they are needed, but no one has been sure how they should be accomplished. Most studies have worked with rather restricted regional areas and have tackled only part of the products and institutions. These studies have utilized various approaches, including budgeting on individual farms (4), a study of intermarket price relationships (1), and econometric analysis (5).

The large scale of the dairy industry, with its many complicating features, makes it difficult to formulate a satisfactory interregional analytical framework, especially when trying to emphasize the solution of dynamic problems.

¹ Approved for publication as Purdue Journal Paper No. 1162, August 26, 1957.