Impact of the northeast interstate dairy compact on consumer prices for fluid milk

The objective of this paper is to analyze the impact of the Northeast Compact on retail fluid milk prices in New England. An econometric model was estimated to simulate the farm-to-retail price spread and to analyze the impact of the Northeast Compact on retail milk prices. The results found that retail milk prices rose 30.5 cents per gallon in Boston and 31.4 cents per gallon in Hartford over the Compact period compared with the pre-Compact period. About 70% of this increase was directly attributable to the Northeast Compact.