A regional model of U.S. milk supply response is specified and estimated. The results suggest that, while being very inelastic in the short run, milk supply tends to be elastic in the longer‐run. Also, the effects of milk price or feed price on milk production are found to vary across regions. This indicates that dairy pricing policy and feed grain policy do affect the regional evolution of U.S. dairy production.
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Chavas et al. (1990) studied this question.
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