CONTENTS

Optimal Seasonal Allocation of Generic Dairy Advertising Expenditures

Tables and Figures

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NEC-63 Spring 2004 March 25-26, 2004 Holiday Inn - Inner Harbor Baltimore, Maryland Conference on Structural Change and Checkoff Programs More information

Tables and Figures

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Table 1. Average Quarterly Elasticities, Variables, and Computed Parameters, 1997-2001.
Quarter	Generic Adv. Expend. ($mil)		Class & Farm Prices			Fluid Supply & Product Disappearance (MFE)
	Fluid Milk	Cheese	Class I	Class III	Blend Price	Milk Supply	Fluid Milk	Cheese
1	43.454	13.943	16.38	12.21	14.47	40.48	14.00	15.97
2	43.080	13.324	15.57	11.97	13.93	41.85	13.49	16.64
3	37.211	11.567	15.97	14.09	15.13	39.72	13.59	16.92
4	39.211	15.055	17.11	12.95	15.30	39.77	14.16	17.70
Average	40.739	13.472	16.26	12.81	14.71	40.45	13.81	16.81
	Price Elasticities		Generic Adv. Elasticities		Revenue Shares		Price Elasticity wxt Gen.Adv.
Quarter	Fluid Milk	Cheese	Fluid Milk	Cheese	Fluid Milk	Cheese	Fluid Milk	Cheese
1	0.046	0.298	0.0304	0.0336	0.255	0.226	0.085	0.055
2	0.052	0.297	0.0290	0.0305	0.234	0.231	0.079	0.050
3	0.055	0.307	0.0286	0.0273	0.241	0.276	0.078	0.044
4	0.050	0.308	0.0290	0.0277	0.270	0.266	0.080	0.045
Average	0.051	0.303	0.0293	0.0298	0.250	0.250	0.080	0.048
Note: Advertising expenditures and prices are in real $2001, product disappearance is on a Milk Fat Equivalent basis (MFE). Revenue shares are based on class prices and product disappearance.

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Table 2. Producer Surplus Changes from Allocation Rules.
Average Quarterly Changes, 1997-2001 ($million, 2001$)
Quarter	Fluid Milk		Cheese
	Rule 1	Rule 2	Rule 1	Rule 2
1	6.04	1.31	1.25	0.56
2	-21.01	-21.35	0.02	-1.62
3	22.57	17.42	21.40	20.47
4	22.50	22.34	-9.84	-11.84
Total	$30.10	$19.72	$12.83	$7.58
Advertising Annual Advertising Expn.	$162.96	$162.96	$53.89	$53.89
PS Proportion	0.18	0.12	0.24	0.14
*Note: Rule 1 applies the allocation rule to each year's estimated quarterly parameters, Rule 2 uses historical 5-year average parameters.

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