Loren W. Tauer
New York dairy farm data over the years 1994–2002 were used to estimate the impact of recombinant bovine somatotropin (rbST) use on the cost of producing a hundredweight of milk. Both fixed and random effects models were estimated. Selfselection bias in the use of rbST was not found to exist. Results imply that the use of rbST on these dairy farms reduces the net cost of producing a hundredweight of milk somewhere between $0.23 and $0.52. For 20,000 pound average per-cow production, this would be a net cost reduction of $46–104 per cow.
Key words: Profitability of biotechnology, recombinant bovine somatotropin.