Marketing and Pricing of Milk and Dairy Products in the United States By Ken Bailey Department of Agricultural Economics & Rural Sociology Penn State University Table of Contents || Preface || Order the Book

I vividly remember how difficult it was to learn about milk marketing when I first became interested in the topic. Milk is so highly regulated and there were so many reports and pamphlets I need to read to get a handle on the subject. I also found there wasn’t a lot written about how milk was actually marketed. That’s when I got the idea to write this book. I wanted to blend the theory of milk marketing, often published solely in USDA reports, with how milk is actually marketed.

This book provides a detailed overview of how milk is produced, marketed and priced in the United States. It was designed to provide a complete understanding of these issues to the novice. The audience for the book was farmers, academia, government and industry.

Having to deal with the dairy industry on a daily basis provided me with a unique perspective. I have had the opportunity to work with many dairy farmers and their cooperatives, as well as proprietary processors of milk and dairy products. It’s fun to visit cheese, ice cream, butter and fluid bottling plants all over the U.S. I’ve also visited industry organizations such as the International Dairy Foods Association and promotion organizations such as Dairy Marketing, Inc. and folks in the MilkPEP program.

All of this has provided me with a unique perspective of the U.S. dairy industry. I came up with the idea of incorporating that understanding into a textbook about four years ago. My idea was to provide a historical background of milk marketing, review the basic theory and economics of milk pricing, and then provide a more real work understanding of what really happens. I also provided a brief review of dairy processing so that the reader understood what the difference was between homogenization and pasteurization, as well as what lactose and whey protein concentrate is.

I also made a special effort not to write the book as an economics textbook. Our profession sometimes gets too analytical. A lot of the major issues in the dairy industry deal with institutions. Also, prices for dairy products is largely determined in a very grey area of marketing; prices and income have only a limited quantifiable impact on supply and demand. Understanding the grey area of marketing is what I tried to accomplish with this book.