Dairy Programs’ Office of the Chief Economist maintains a dynamic econometric model of the U.S. dairy industry to support its economic analysis and forecasting responsibilities. The model is comprehensive, including the supply of milk, the allocation of butterfat and nonfat solids to fluid milk and the major manufactured dairy products, and consumer demand for milk and dairy products. The model’s supply and demand equations are estimated using data from years 1980 through 2005. The model includes variables for the Federal Milk Marketing Order (FMMO) system, Milk Price Support Program (MPSP), and Milk Income Loss Contract (MILC) program. It is specified to generate long-term supply, demand, and price projections that are consistent with USDA’s official baseline projections. The model is estimated and simulated with SAS statistical software (SAS Institute, Inc., SAS/ETS User’s Guide, Version 9.1). The model simultaneously forecasts milk production, fluid milk and manufactured dairy product consumption, dairy manufacturing allocation, dairy product prices, and farm milk prices sequentially along the designated time path of 2006 through 2016. Butterfat and nonfat solids are allocated through the use of conversion factors consistent with farm milk and dairy products. Prices for dairy products, fluid milk, and farm milk are solved within the model to achieve equilibrium conditions for supply and demand.