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Climate Change and Milk Price Volatility in Indonesia

Author

Listed:
  • Arief Daryanto

    (Department of Economics, IPB University, Indonesia)

  • Diani Aliya Sofia

    (Department of Economics, IPB University, Indonesia)

  • Sahara Sahara

    (Department of Economics, IPB University, Indonesia)

  • Antonya Rumondang Sinaga

    (College of Vocational Studies, IPB University, Indonesia)

Abstract

The international food crisis from 2007 to 2010 impacts the fluctuation of world's food prices. Indonesia is one of the developing countries that are vulnerable to volatility in food prices because food is a necessity that is still partly imported and hence impactingdomestic prices. This problem has been excerbated by tthe fact that domestic fresh milk production made a relatively small contribution to the availability of milk to meet Indonesia's consumption. This study aims to analyze the volatility of fresh milk prices in three largest milk producer regions in Indonesia, namely East Java, West Java, and Central Java, from June 2015 to December 2018. The study used ARCH GARCH model. The results of this study shown that fresh milk prices in West Java was volatile and it was influenced by the volatility of the previous period. Climate change and feed prices yielded positive responses on the volatility of fresh milk price in West Java. Subsequently, it achieved a stable price level in the long run. In the short run, the highest response of the milk price volatility shock was shown by the West Java's fresh milk price volatility itself.

Suggested Citation

  • Arief Daryanto & Diani Aliya Sofia & Sahara Sahara & Antonya Rumondang Sinaga, 2020. "Climate Change and Milk Price Volatility in Indonesia," International Journal of Economics and Financial Issues, Econjournals, vol. 10(2), pages 282-288.
    • Handle: RePEc:eco:journ1:2020-02-32
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    References listed on IDEAS

    as
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    Cited by:

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    2. Aneta Bełdycka-Bórawska & Piotr Bórawski & Michał Borychowski & Rafał Wyszomierski & Marek Bartłomiej Bórawski & Tomasz Rokicki & Luiza Ochnio & Krzysztof Jankowski & Bartosz Mickiewicz & James W. Dun, 2021. "Development of Solid Biomass Production in Poland, Especially Pellet, in the Context of the World’s and the European Union’s Climate and Energy Policies," Energies, MDPI, vol. 14(12), pages 1-22, June.
    3. Piotr Bórawski & Aneta Bełdycka-Bórawska & Lisa Holden, 2023. "Changes in the Polish Coal Sector Economic Situation with the Background of the European Union Energy Security and Eco-Efficiency Policy," Energies, MDPI, vol. 16(2), pages 1-17, January.
    4. Piotr Bórawski & Rafał Wyszomierski & Aneta Bełdycka-Bórawska & Bartosz Mickiewicz & Beata Kalinowska & James W. Dunn & Tomasz Rokicki, 2022. "Development of Renewable Energy Sources in the European Union in the Context of Sustainable Development Policy," Energies, MDPI, vol. 15(4), pages 1-20, February.

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    More about this item

    Keywords

    ARCH-GARCH; fresh milk prices; VECM; volatility;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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