Can the US compete with dairy exporting nations?

DAIRY INDUSTRY COULD COMPETE WITH DAIRY IMPORTS IF CURRENT U.S. IMPORT QUOTAS WERE ELIMINATED. THE QUOTA ON MILK IMPORTS NOW RESTRICTS THEM TO ABOUT 1.5 PERCENT OF DOMESTIC MILK PRODUCTION. THE AUTHORS CONCLUDE THAT THE U.S. DAIRY INDUSTRY CAN COMPETE PRICE-WISE WITH ALL COUNTRIES EXCEPT AUSTRALIA AND NEW ZEALAND. FREE TRADE, WITH A TOTAL ABSENCE OF EXPORT SUBSIDIES, WOULD ENCOURAGE MILK PRODUCTS TO BE IMPORTED FROM AUSTRALIA AND NEW ZEALAND, ALONG WITH SOME SPECIALTY PRODUCTS FROM EUROPE. UNDER SUCH A POLICY, ABOUT 4,200 U.S. DAIRY FARMS WOULD BE ELIMINATED BY 1980. CONSUMER PRICES WOULD BE SOMEWHAT LOWER THAN AT PRESENT. AMERICAN DAIRY FARMS WOULD BE REDUCED IN NUMBERS BUT WOULD NOT VANISH UNDER A FREE TRADE POLICY, BECAUSE AUSTRALIA AND NEW ZEALAND LACK THE RESOURCES TO INCREASE THEIR EXPORTS BY MORE THAN AN ADDITIONAL 1.56 MILLION METRIC TONS BY 1980. THIS IS ONLY ABOUT THREE PERCENT OF THE U.S. MARKET.