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Population Dynamics And Milk Supply Response In The Us Lake States

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  • J.‐P. Chavas
  • A. F. Kraus

Abstract

This paper develops a dynamic model of a dairy cow population and of milk supply response. When applied to the US Lake States, the model provides evidence against the Nerlovian model. It suggests that the pattern of dynamic effects of prices on cow numbers varies for different prices. The estimated dynamic supply elasticities provide some useful information on the nature of dairy production adjustments. For example, the response of milk supply to market prices is found to be very inelastic in the short run. It takes at least 7 years of sustained change to obtain an elastic response to milk price. Also, feed price and slaughter cow price are found to have smaller effects on dairy supply than milk price, but larger effects than risk, hay price or capital cost.

Suggested Citation

  • J.‐P. Chavas & A. F. Kraus, 1990. "Population Dynamics And Milk Supply Response In The Us Lake States," Journal of Agricultural Economics, Wiley Blackwell, vol. 41(1), pages 75-84, January.
    • Handle: RePEc:bla:jageco:v:41:y:1990:i:1:p:75-84
    DOI: 10.1111/j.1477-9552.1990.tb00620.x
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    References listed on IDEAS

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    1. Jean-Paul Chavas & Stanley R. Johnson, 1982. "Supply Dynamics: The Case of U.S. Broilers and Turkeys," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 64(3), pages 558-564.
    2. Marc Nerlove, 1958. "Adaptive Expectations and Cobweb Phenomena," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 72(2), pages 227-240.
    3. Jean-Paul Chavas & Richard M. Klemme, 1986. "Aggregate Milk Supply Response and Investment Behavior on U.S. Dairy Farms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(1), pages 55-66.
    4. Gallant, A. Ronald, 1975. "Seemingly unrelated nonlinear regressions," Journal of Econometrics, Elsevier, vol. 3(1), pages 35-50, February.
    5. Lutkepohl, Helmut, 1981. "A model for non-negative and non-positive distributed lag functions," Journal of Econometrics, Elsevier, vol. 16(2), pages 211-219, June.
    6. Harlow W. Halvorson, 1958. "The Response of Milk Production to Price," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 40(5), pages 1101-1113.
    7. Buxton, Boyd M., 1985. "Factors Affecting U.S. Milk Production," Agricultural Economic Reports 307971, United States Department of Agriculture, Economic Research Service.
    8. Rudolf Wolffram, 1971. "Positivistic Measures of Aggregate Supply Elasticities: Some New Approaches—Some Critical Notes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 53(2), pages 356-359.
    9. Bruce Traill & David Colman & Trevor Young, 1978. "Estimating Irreversible Supply Functions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 60(3), pages 528-531.
    10. William Lin, 1977. "Measuring Aggregate Supply Response under Instability," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 59(5), pages 903-907.
    11. Dean Chen & Richard Courtney & Andrew Schmitz, 1972. "A Polynomial Lag Formulation of Milk Production Response," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 54(1), pages 77-83.
    12. A. J. Rayner & R. J. Young, 1980. "Information, hierarchical model structures and forecasting: A case study of the stock of dairy cows in England and Wales," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 7(3), pages 289-313.
    13. Lin, William, 1977. "Measuring Aggregate Supply Response Under Instability," 1977 AAEA-WAEA Joint Meeting, July 31-August 3, San Diego, California 283678, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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    Cited by:

    1. Muhammad Akmal, 1994. "The Production and Consumption of Livestock Foods in Pakistan: A Look into the Future," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 33(1), pages 19-39.
    2. Bozic, Marin & Gould, Brian W., 2009. "The Dynamics of the U.S. Milk Supply: Implications for Changes in U.S. Dairy Policy," Staff Papers 53818, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.
    3. Muhammad Akmal, 1993. "A Dynamic Model of Milk Production Response for Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 32(4), pages 873-884.
    4. Mohammad Pervez Wasim, 2005. "Milk Production Response in Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 10(1), pages 105-121, Jan-Jun.
    5. Marin Bozic & Brian W. Gould, 2009. "Has Price Responsiveness of U.S. Milk Supply Decreased?," Working Papers 0902, The Institute of Economics, Zagreb.

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