Abstract
We study the determinants of somatic cell count (SCC) for farm milk among US dairies. We synthesise much of the work that has been done to model SCC determinants in order to identify the potential impacts of buyer-imposed penalties and incentives within the supply chain. Additionally, we estimate quantile regression for count data to measure impacts specifically for those operations with the highest SCC and to account for the statistical properties of the data. Premiums in particular have the potential to reduce SCC considerably where it is currently the highest. We draw implications for profitability in relation to SCC reduction.
Highlights
The quality of agricultural commodities in the United States, broadly defined, has wide-ranging economic implications
We study the determinants of somatic cell count (SCC) for farm milk among US dairies
We quickly recognised that regressions based on the 0.05 quantile yielded no significant findings, and given that those operations with the lowest SCC levels are of the least policy concern, we dropped these results from our tables
Summary
The quality of agricultural commodities in the United States, broadly defined, has wide-ranging economic implications. Quality drives prices received by producers as well as those paid by consumers in the retail sector. Consumers and all agents of the post-farm gate food supply chain increasingly demand food that is safe and traceable, factors tied directly to quality. The quality of US agricultural output, relative to that of other nations, shapes international supply, demand and trade. We draw upon a wealth of research across disciplines to develop an economic model to understand the quality determinants of farm milk, or bulk-tank fluid milk, as measured by somatic cell count (SCC). A great deal of work in the dairy industry, much of it summarised by Blowey and Edmondson (2010), has focused on SCC, because it shares a wellestablished, inverse relationship with quality. A growing body of international evidence (e.g. Bennett, 2003) suggests that reductions in SCC in the US dairy industry can mitigate the economic costs of diminished yields or infectious diseases that have been linked to elevated SCC and related bovine health issues
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