The purpose of this paper is twofold: first, to review the current economic situation of the dairy industry and the dominant dairy policies and issues of 1982 and second, to assess the economic and political outlook for the dairy industry in 1983. The paper begins with a discussion of the economic status of dairy markets in the U.S. and New York at the end of 1982. This is followed by a review of the major policy issues of 1982. The paper concludes with some comments on the 1983 economic outlook for the dairy industry in the U.S. and New York and on the possible policy changes that could shape the dairy economy in the future.