UC Davis Agricultural and Resource Economics

Jarrett Hart, University of California, Davis

Economic, Resource, and Environmental Consequences of Changes in By-Product Availability for and Use by California Dairies

Date and Location

Thursday, October 29, 2020, 4:10 PM - 5:30 PM

Abstract

By-product feeds are widely used by most dairies in California. More than 70 by-product feeds are used in California dairy rations. Some of these feeds are major contributors to dairy rations in California. Not only are by-products vital contributors to California dairy rations, demand for by-products by California dairies provides a crucial outlet for by-products that are produced along with major commodities, foods, and beverages. Focusing on two by-products commonly used as rations—almond hulls and spent grain from brewing—we develop and apply simulation models of by-product supply and demand in California. We use an equilibrium displacement model to simulate the effects of a reduction in the demand for the by-product from dairies as well as the effects of reduction in supply of the by-product that is available to California dairies. Our simulations suggest that large changes in demand for or a supply of almond hulls and spent grain lead to little or no changes in the prices of quantities of milk, almonds, and beer. However, we find that large supply and demand shifts for by-products have substantial environmental consequences and result in considerable changes in resources used by dairies.

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