Insofar as dairy policy is concerned, the recent months have been as turbulent as any in the history of the dairy price support program. Faced with a record surplus of milk and unprecedented price support expenditures, the President and Congress have decided that dairy price supports must be reduced. With the expiration of the 1977 Food and Agriculture Act on September 30, 1981, a new Farm Bill was expected on October l

however, legislation was not passed until mid-December. Difficult decisions regarding price support policy contributed to the more than two-month delay in formulating and enacting agricultural policy for the next four years, Barring any interim changes, dairy price support policy has been charted through September 1985. The purpose of this paper is to 1) discuss the new dairy support policy and 2) try to assess the implications of the current economic situation and price support policy for the dairy industry in 1982 and beyond. I will begin by differentiating price support policy from other federal dairy programs and reviewing the principal features of the price support program.