INFORMATION OBTAINED IN THE INVESTIGATION The Domestic Dairy Situation Milk for sale in the fluid state is generally produced near the large population centers, whereas that used in manufactured products is produced largely in the North Central region of the United States. In recent years, the North Central region has accounted for nearly 70 percent of the milk used in manufactured dairy products. Wisconsin and Minnesota have been the leading States producing that milk. Other important sources have been Iowa, New York, and California. In recent years Wisconsin, Minnesota, and Iowa accounted for more than half of the U.S. production of butter, Cheddar cheese, and nonfat dry milk. In recent years about half of the U.S. production of milk has been consumed in fluid form; virtually all of the remainder has been used to manufacture dairy products (fig. 1). In 1967 about 44 percent of the volume used in manufactured dairy products was used in butter; 29 percent was used in cheese; 16 percent, in frozen dairy products (principally ice cream); and the remaining 11 percent, in a variety of products, including condensed and evaporated milk. Recent trends in the U.S. production of milk During the past decade the U.S. production of milk has usually varied less than 2 percent from year to year. It increased irregularly from 121 billion pounds in 1953 to a record 127 billion pounds in 1964, and then declined gradually to about 119 billion pounds in 1967 (table 1). The value of the output of milk in 1967, however, was $6.0 billion, an alltime high. The decline in milk production in recent years is generally attributed to more favorable returns in alternative farm enterprises, particularly livestock, and to increasing opportunities for off-farm employment. From time to time over the years the Secretary of Agriculture has increased the price-support levels when the output of milk has declined. The most recent of such increases occurred on April 1, 1968, when the support price for manufacturing milk was increased from $4.00 to $4.28 per hundred pounds (table 2), the highest in the last two decades. In virtually all months of the years 1965-67 and in the first 9 months of 1968, the production of milk was below that in corresponding months of the preceding year. The output in January-September 1968 was 1.5 percent smaller than the output in the same period of 1967. The decrease in the production of milk has been due largely to a decline in the number of dairy cows on farms which was only partially offset by an increase in the output per cow. In November 1968 the Department of Agriculture estimated that the output of milk in 1968 would be about 1 percent below the level of 1967. Since the early 1950's the U.S. dairy farmers have altered their operations considerably, through improvements in breeding, feeding, disease control, and management. In 1953 the average annual output of milk per cow was about 5,500 pounds; in 1967 the average was about 8,800 pounds. In the same period, the number of milk cows on U.S. The de farms declined from 21.7 million head to 13.5 million head. cline in the number of dairy farms in operation was at a greater rate than that in the number of dairy cows. In recent years the aggregate number of U.S. farms selling milk has decreased by about 10 percent annually, although the number of dairy farms with annual sales of $20,000 or more has increased. The average number of cows on U.S. dairy farms increased from 26 per farm in 1959 to 31 per farm in 1964, and has since increased further. The farmers continuing to sell milk have expanded and specialized their operations to take advantage of improvements in technology, gain access to better markets, and offset rising costs. Manufactured dairy products as an outlet for milk Notwithstanding a About 60 billion pounds of milk a year, equal to half of the production, is used in manufactured dairy products. steady increase in the use in cheese, the quantity in all manufactured dairy products has been reduced since 1964, principally as the result of a reduction in the use in butter. The utilization by product is shown in relative detail in table 3 of the appendix, and is summarized, |