The welfare effects of increased milk production associated with the use of recombinant bovine somatotropin (rBST) on dairy operations in the USA were examined for 1996. Results that derived from three different estimates of the milk-production response to rBST were evaluated and compared. One estimate, derived from a survey of dairy producers in Connecticut, led to economic-impact estimates that were not statistically significant. A second, derived from a national survey that concentrated on the health and management of dairy cattle, led to estimates that were unbelievably high. A third, derived from a national survey that concentrated on the economics of dairy producers, provided the most reasonable estimates of economic impacts. Results of economic analysis, using the latter results, indicated that if rBST had not caused milk production to increase, then the market price of milk would have been 2·2±1·5 cents/kg higher, and the total value of the milk produced would have risen from $23·0±0·6 billion to $24·1±1·0 billion. A welfare analysis demonstrated that the increased milk production (and the reduced market price) associated with the use of rBST in the USA caused the economic surplus of consumers to rise by $1·5±1·0 billion, while the economic surplus of dairy producers fell by $1·1±$0·8 billion. Increased milk production associated with rBST yielded a total gain to the US economy of $440±280 million. An analysis of annual percent changes in the number of dairy cows per operation, milk production per cow, total milk production, total number of dairy cows, and total number of dairy operations in the USA suggested that the dairy industry's long-term economic growth path was stable from 1989–2001 inclusive, and did not receive a shock resulting from the introduction of rBST.