Effects of Milk Solids Content on Consumption of Milk

Strong interest continues for higher solids-not-fat standards for whole, lowfat, and skim milk than those currently established by the Food and Drug Administration for milk in interstate commerce.This paper traces the implications of establishing new national fluid milk standards identical to the current high standards in California.The greatest change in product composition implied by the adoption of the California standards would be in lowfat milk, where the solids-not-fat standard would rise from 8.25 to 10.0%.Whole and skim milks' composition would be less dramatically affected.Fortification costs are estimated at 3~/.5 gal (1.89 L) for whole milk, about 55 for lowfat milks, and about 1.5~ for skim milk.Retail prices are projected to rise 3 to 5% across the fluid product line.Assuming no change in consumer preferences, fluid milk sales are estimated to drop 1.2 to 5.1% nationwide upon adoption of the California solids standards (the percentage drop dependent upon the responsiveness of consumers to price changes for fluid milk).Total sales of solids-not-fat would increase 21 to 184 million ib (19.52 to 83.46 million kg) annually under higher solids standards, which is not enough to affect significantly the current supply-demand imbalance in the dairy industry.