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Retail Dairy Prices Fluctuate with the Farm Value of Milk

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Author Info

  • Stewart, Hayden
  • Blayney, Donald P.

Abstract

Farm milk prices tend to be volatile. Dairy farmers, industry pundits, and policymakers further tend to react to price volatility with alarm. One point of concern is the response of retail prices. This study investigates farm-to-retail price transmission in the 2000s for whole milk and cheddar cheese. Results show that price shocks at the farm gate are transmitted with delay and asymmetry to retail. Differences in the nature of price transmission for whole milk and cheddar cheese prices are also identified.

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File URL: http://purl.umn.edu/117772
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Bibliographic Info

Article provided by Northeastern Agricultural and Resource Economics Association in its journal Agricultural and Resource Economics Review.

Volume (Year): 40 (2011)
Issue (Month): 2 (August)
Pages:

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Handle: RePEc:ags:arerjl:117772

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Web page: http://www.narea.org/
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Related research

Keywords: asymmetric price transmission; cointegration; dairy prices; error correction models; Demand and Price Analysis; Livestock Production/Industries;

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References

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  9. Lass, Daniel, 2005. "Asymmetric Response of Retail Milk Prices in the Northeast Revisited," Research Reports 149026, University of Connecticut, Food Marketing Policy Center.
  10. Oral Capps & Pablo Sherwell, 2007. "Alternative approaches in detecting asymmetry in farm-retail price transmission of fluid milk," Agribusiness, John Wiley & Sons, Ltd., vol. 23(3), pages 313-331.
  11. Stock, James H, 1987. "Asymptotic Properties of Least Squares Estimators of Cointegrating Vectors," Econometrica, Econometric Society, vol. 55(5), pages 1035-56, September.
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Cited by:
  1. Loy, Jens-Peter & Holm, Thore & Steinhagen, Carsten, 2012. "Vertical Price Transmission In Differentiated Product Markets: A Disaggregated Study For Milk And Butter," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 123284, Agricultural and Applied Economics Association.
  2. Holm, Thore & Loy, Jens-Peter & Steinhagen, Carsten, 2012. "Bio Auch Bei Der Preissetzung: Konsummilch In Deutschland," 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 137159, German Association of Agricultural Economists (GEWISOLA).

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