Current activities and timetables for the individual projects during FY 2004 are described below.

98-1 Invitational Workshops for Dairy Marketing Economists and Policy Analysts.
Plans: The eleventh annual workshop will be held during April 2004 in Washington DC, with the theme "Dairy Policy and Product Innovation." Additional educational sessions with congressional staff during and after the workshop will be held.

98-3 Benchmarking Dairy Farm Costs and Performance
Plans: An administrative front end is in progress as a part of the third rewrite of the internet program. Part of the administrative program is being used this year to pre-print farm check-in forms. It will also allow an administrator to evaluate the quality of the record entries and approve the records for query from the database. The administrative portion of the page will ultimately streamline report generation and tables for publication. The new program also provides a stand-alone version of the data collection portion of the program, which allows users to complete data entry off-line. The data can then be uploaded to the main database via any internet connection. The revised program also provides a more detailed collection of data to calculate accrual values. The stand alone version allows users to download previous farm records and yearly constant values before going to farm for current year's collection effort. New partnerships for national data collection have been forged other states, the Farm Service Agency, Farm Credit and more are being pursued. We currently have more than 5000 farm records in the database.

98-4 Cost Analysis of Dairy Processing Firms
Plans: There is much industry support for this project as understanding cost of processing is now key to "make allowances" used in our current Federal Milk Marketing Orders formulas for milk prices and component values. However, funding under the original project is depleted. New funding sources will be sought to supply travel and support for the collection of data from individual plants. This year, a cost of processing survey was administered to ultra-filtration plants in the country and results have been summarized. A value-added survey has been drafted to assess the costs of on-farm processing of dairy products.

99-1 Timely Popular Press Articles on Current Dairy Markets and Policy Issues
Plans: The partnership with the Hoard's Dairyman, the single most widely read dairy farm magazine, will continue. Thirty-eight articles have been published and authors and subject matter for another twelve have been identified for 2004.

00-2 On-line Dairy Database
Plans: The cpdmp.cornell.edu website has begun to automatically harvest data from secondary reports. More than 100,000 data points have been collected so far and these are being used to automatically provide up-to date charts and graphics on the web site. An initial evaluation of a web browser to provide access to data for individuals has been dropped. We are currently pursuing the advantages of a separate internet application. This approach provides much more flexibility for data query and delivery. A prototype with a milk price estimator has shown promise.

00-3 Technical and Economic Feasibility of a Milk Refining Plant
Plans: Cornell researchers will continue to develop market information on current and potential uses for new products produced through the membrane separation processes. The functional attributes of the new dairy ingredients as determined by the food science research has been compiled. Technical information from membrane manufacturers and existing plants has been gathered to assess the cost of processing these new products. A market impact study for some of the milk fractions is being conducted and will be included in the report.

00-4 Internet-Based Educational Materials on Dairy Markets, Pricing and Policy
Plans: Additional weblets topics have been identified and will be added to the web page this year. 00-5 A Survey of Farm Milk Checks
Plans: The methods for collecting milk check information have been refined and are stable. Additional efforts will no be directed towards increasing participation in the survey, both within and outside the Northeast region.

04-1 Dynamic Assessment of US Dairy Policies
Plans: There is an increasing recognition that dairy policies can have long term effects on price levels and farm structure, yet most quantitative models of dairy market outcomes use a comparative statics framework. The objective of this sub-project is to develop and refine a series of dynamic models to enhance our understanding of medium- and longer term impacts of dairy policies. This project will build upon previous dynamic modeling efforts related to exploring price volatility and impacts of policy on farm structure. Specific activities include a) calibration of a system dynamics model relating the dairy price support program to changes in farm structure, b) development of a conceptual dynamic model to explore market outcomes of assigning new products (such as low carbohydrate fluid milk products), and c) exploration of the institutional and market dynamics of complete deregulation of US dairy markets. A M.S. thesis will be completed by August 2004 under a). A research bulletin, presentations at industry meetings and a journal article submission will be completed by December 2004 under b), and a review of literature and dairy market liberalization case studies from other countries will be completed under c) during the project period.

04-2 Financial Performance of Small-scale Dairy Processing Enterprises
Plans: There has been a great deal of interest at the federal and state levels in recent years in what has been termed "value added" processing of farm products (i.e., processing activities by producers themselves). A number of states (including New York and Wisconsin) have provided financial assistance and training to dairy farmers interested in exploring processing their milk and marketing dairy products (e.g., specialty cheeses, non-homogenized milk, organic yogurt) directly to consumers. Despite a great deal of rhetoric about how these "value-added" activities can save "family farms," the empirical evidence on the characteristics, financial viability and performance of these small-scale dairy processing businesses is limited. This project will cooperate with researchers in Wisconsin and Vermont to survey 30-40 existing small-scale dairy processing enterprises. The focus will be on documenting the financial performance and marketing practices of the enterprises. A research report reporting the survey results will be produced by December 2004.

04-3 Spatial Modeling of Policy and New Product Impacts
Plans: Efforts during the coming months will emphasize documentation of existing spatially-disaggregated mixed complementarity programming (MCP) model structures and refinement of results relating to the impact of milk protein product imports on US dairy markets. A project report will be submitted to USDA and the US International Trade Commission in March 2004, a PhD dissertation and research bulletin will be completed by September 2004, and journal articles will be submitted by December 2004. Additional refinements to the basic model structure, such as additional products and regions, will be explored during 2004 and implemented as appropriate during the project period. Modifications to a highly spatially-disaggregated optimization model (Pratt et al., 1997) will be made to assess the impacts of ultra-filtered (UF) milk products on the location of UF processing facilities and potential impacts on the location differentials currently paid for milk. Additional UF products will be added to the model and the feasibility of including additional non-linear yield function constraints will be explored.

04-4 Niche Market Evaluation for Specialty Cheeses
Plans: We know that small-scale processors have a difficult time competing in the market place with commodity products. Dairy producers are increasingly interested in adding value to the milk they produce by considering on-farm processing. This project will help them look for niche market products. In the Northeast, we begin by working with ethnic markets along the Boston-New York-Washington metropolitan area. Foreign-trained chefs looking for exotic ingredients are another target and pairing specialty cheeses with other products such as wine producers will be examined. The marketing aspect of value-added processing is perhaps the most underestimated task in the new venture.

Last updated February 2004