Evaluation of the Base-Excess Plan for Leveling Seasonal Milk Production: Case Example of Maryland

Author:

Prindle Allen M.

Abstract

Seasonal incentive plans, such as the base-excess plan, have been initiated to encourage producers to shift their production to be more similar to seasonal consumption patterns. The effectiveness of the seasonal incentive plan was evaluated by examining Maryland milk production data for the period 1966–78. The analysis indicated that month-to-month variation in milk production has increased in recent years, and suggests that current seasonal incentive plans be evaluated to encourage dairy producers to shift their production schedules.

Publisher

Cambridge University Press (CUP)

Reference11 articles.

1. U.S. Department of Agriculture: Agricultural Marketing Service. “Federal Milk Marketing Order No. 4.” Reprinted from Federal Register of April 30, 1975 (effective June 1, 1975).

2. Maryland Department of Agriculture, Maryland Agricultural Statistics, June 1979, and earlier issues.

3. U.S. Department of Agriculture. Compilation of Agricultural Marketing Agreement Act of 1937, with Amendments as of January 20, 1971. CMS Agricultural Handbook 421, October 1971.

4. Under the “Louisville” plan or “takeout and payback” plan, a portion of the receipts from the sale of milk is withheld from the producer in the seasonally heavy production season. Then, during the several fall or lower production months, a portion of the withheld amount is repaid to producers based on the milk production during the month.

5. Lasley F. A. and Sleight L. G. Balancing Supply with Demand for Fluid Milk Markets—A Cost Comparison. USDA-ESCS Staff Report, October 1979.

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