AN ECONOMIC EVALUATION OF FLUID MILK SUPPLY,
 MOVEMENT AND UTILIZATION III FLORIDA


 INTRODUCTION

 A knowledge of market conditions and alternative courses of
 action by both buyers and sellers is among the several assumptions
 which must be met for a milk market to be considered competitive./
 The marketing of dairy products involves a vast array of individuals,
 firms and agencies. Each has a need for general market information
 plus a specialized knowledge of quality, quantity, demand and price
 in the market for the particular commodity handled. Market growth
 potential also needs to be ascertained and made known to all members
 of the dairy industry. Costs and margins for producing, processing
 and distributing fluid milk are examples of types of economic in-
 formation necessary in appraising the efficiency of the marketing of
 dairy products,

 Operators of dairy farms should be informed as to current
and potential milk supplies and present utilization of milk in their
own and alternative market areas. In regulated markets, they should
understand methods used by control agencies in pricing milk.
They should be aware of the effects of seasonal patterns of production
and consumption of milk on price. They should also know something
of their relative competitive position in the production of milk,
especially as this affects the movement of milk between producing
areas,


 Defining the Problem

 For the past 20 to 25 years, the dairy industry in Florida
has experienced rapid and continuous changes in (1) economic
conditions (2) population characteristics of its markets and (3)
technology of producing, processing and distributing its products.



 1/Many markets for processed milk products approximate an
oligopoly with a few large sellers of brand-differentiated products
and many small buyers. The small number and large size of dairy
farms in Florida markets results in conditions similar toan oligopsony
as well.