Dairy: Background for 1990 Farm Legislation

The U.S. dairy industry is primarily a domestic industry with both imports and exports hovering around 2 percent of U.S. milk production. After a period of relatively high dairy price supports in the late 1970's and early 1980's which distorted milk prices and generated substantial excess milk supplies, the industry spent most of the 1980's attempting to reduce dairy program purchases and Government costs. Continuing issues are the appropriate price support level, the degree of automatic price adjustment, and the proper formula or mechanism for attaining it.