Can We Afford A Dairy Program - PowerPoint PPT Presentation

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Can We Afford A Dairy Program

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Aus/NZ = 19% U.S. share has steadily increased, but remains small. U.S. Dairy Exports, 1990-2000 ... Domestic vs. International Affordability ... – PowerPoint PPT presentation

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Title: Can We Afford A Dairy Program


1
Can We Afford A Dairy Program?
  • The Road to the 2002 Farm Bill
    Implications for Dairy
  • November 27-28, 2000
  • Orlando, Florida

2
Can We Afford A Dairy Program?
  • What are international dimensions?
  • Overview of world dairy production and trade --
    how does the U.S. fit in?
  • International levels of support and protection
    for dairy
  • Dairy and the WTO
  • International issues for U.S. policy

3
World Cows Milk Production
  • U.S. output has exceeded worlds
  • EU production declining
  • Oceania output exploding
  • U.S. production about 15 of world output

4
World Dairy Trade, 1990-2000
  • Butter exports fall
  • Rapid growth in cheese, NFDM, WMP exports
  • Russian butter, NFDM imports have fallen sharply

5
Butter Exports, 2000
  • 1990 shares-- U.S. 4-- EU 36-- Aus/NZ
    40
  • U.S. share ranged from 0 to 22

6
NFDM Exports, 2000
  • 1990 shares-- U.S. 1 -- EU 36-- Aus/NZ
    34
  • U.S. share fluctuated from 1 to 19

7
Cheese Exports, 2000
  • 1990 shares-- U.S. 2-- EU 58-- Aus/NZ
    19
  • U.S. share has steadily increased, but remains
    small

8
U.S. Dairy Exports, 1990-2000
9
Support Levels by Commodity
10
Dairy Support in Major Countries
11
What Goes into the AMS?
  • Direct payments tied to price or output
  • Input subsidies
  • Market price support based on high internal
    prices generally maintained through border
    measures Dairy Sugar Peanuts

12
Dairy Support in the WTO
13
Dairys Share of the AMS, 1997
14
U.S. AMS and Dairy
15
Export Subsidy Commitments
16
U.S. WTO Notifications, 1998
17
Promise of Uruguay Round, 96 Farm Bill
  • Declines in export subsidies, improved market
    access
  • World prices, exports to strengthen
  • 1996 Fair Act eliminated dairy price supports
  • U.S. to become more competitive

18
Where Did the Promises Go?
  • Low U.S. milk prices
  • Burgeoning NFDM stocks
  • Price supports continued
  • Traditional dairy exports flat
  • NE Compact, direct dairy payments

19
NFDM Net Removals vs. Exports
20
EU Dairy Reforms Go Slowly
  • Dairy reforms delayed under Agenda 2000
  • Quotas enlarged slightly
  • Small price reductions in 2005
  • Multifunctionality?

21
Domestic vs. International Affordability
  • Continuing price support regime means large
    contribution to AMS
  • Compacts are amber box
  • Supply management is blue box but U.S. proposal
    calls for elimination of blue box
  • Direct payments are amber but would be much
    smaller than price support regime

22
What About Exports?
  • Can the U.S. be a competitive exporter under
    present regime?
  • What are implications of no EU export subsidies?
  • What are cost-benefits for U.S. dairy of moving
    to more market oriented system?
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