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Demand for dairy products in Mexico

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  • Ayşen Tanyeri‐Abur
  • C. Parr Rosson

Abstract

Mexico is the world's largest importer of non‐fat dry milk (NFDM) and imports of cheese, fluid milk, and whey have increased rapidly in the past four years. In the wake of GATT and the NAFTA, as well as recent economic developments in Mexico, world dairy markets will be affected as a result of changes in the Mexican dairy sector. The study analyzes both domestic and import demand for dairy products in Mexico to determine price and income elasticities as well as import elasticities. The results indicate that the demand for fluid milk is the most responsive to price changes and NFDM demand is inelastic with respect to its own price. There is little subtitution between fluid milk and non‐fat dry milk, although fluid milk is relatively elastic, which suggests the existence of other substitutes for fluid milk. Estimation of import demand equations reveal similar trends in response to price changes, but income elasticity of imports was highest for fluid milk which suggests that Mexico will import possibly more fluid than dry milk as incomes rise. The exchange rate was the most significant variable influencing all dairy product imports.

Suggested Citation

  • Ayşen Tanyeri‐Abur & C. Parr Rosson, 1997. "Demand for dairy products in Mexico," Agricultural Economics, International Association of Agricultural Economists, vol. 16(1), pages 67-76, March.
    • Handle: RePEc:bla:agecon:v:16:y:1997:i:1:p:67-76
    DOI: 10.1111/j.1574-0862.1997.tb00442.x
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    References listed on IDEAS

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    1. Manuel R. Villa-Issa, 1990. "Performance of Mexican Agriculture: The Effects of Economic and Agricultural Policies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(3), pages 744-748.
    2. Knutson, Ron & Rosson III, C. Parr & Outlaw, Joe & Angel, Amy & Miller, John, 1993. "NAFTA and the U.S. Dairy Industry," Working Papers 258062, Texas A&M University, Agricultural and Food Policy Center.
    3. Hallberg, Milton C. & Cranney, James R. & Smith, Stephen M. & Valdes, Constanza M., 1992. "The Mexican Dairy Economy and Potentials of Liberalized Trade for the U.S. Dairy Industry," AE & RS Research Reports 257725, Pennsylvania State University, Department of Agricultural Economics and Rural Sociology.
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    Cited by:

    1. Xochitl Cruz-Núñez & Luis Conde & Luis Ruiz-Suárez, 2008. "Use of IPCC GHG key sources analysis to Mexico’s environmental policy," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 13(2), pages 179-191, February.

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