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A new approach to identify market power along agri-food supply chains – the German dairy supply chain

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  • Grau, Aaron
  • Hockmann, Heinrich

Abstract

In this paper a new approach for the estimation of oligopsony market power along a supply chain is developed. The theoretical framework relies on NEIO theory. Two subsequent markets with oligopsony power are modeled. Price equations, farm-processor and processor-retailer, are embedded in a price transmission framework. The reduced error correction representation is estimated via the Kalman-Filter to allow for time-variation in the long-run cointegration parameters. A dynamic factor model is applied to extract common factors from the time-varying coefficients and with the estimated results the processing industry’s and retail sector’s average input conjectural variations are calculated. The framework is applied to the German dairy supply chain over the time period January 2000 to March 2011. Results indicate lower levels of market imperfections on the raw milk and dairy output market.

Suggested Citation

  • Grau, Aaron & Hockmann, Heinrich, 2016. "A new approach to identify market power along agri-food supply chains – the German dairy supply chain," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235897, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea16:235897
    DOI: 10.22004/ag.econ.235897
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    1. Žáková Kroupová, Zdeňka & Hálová, Pavlína & Rumánková, Lenka, 2020. "Productivity of Czech Milk Production in European Comparison," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 12(3), September.
    2. Daniele Cavicchioli & Luca Cacchiarelli & Alessandro Sorrentino & Roberto Pretolani, 2022. "Should We Cry over the Spilt Milk? Market Power and Structural Change along Dairy Supply Chains in EU Countries," Sustainability, MDPI, vol. 14(8), pages 1-18, April.
    3. Martini, Bruno Guilherme & Helfer, Gilson Augusto & Barbosa, Jorge Luis Victória & Modolo, Regina Célia Espinosa & da Silva, Marcio Rosa & de Figueiredo, Rodrigo Marques, 2020. "Prediction and Context Awareness in Agriculture: A Systematic Mapping," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 12(3), September.
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    6. Adamides, George, 2020. "Heuristic Evaluation of the User Interface for a Semi-Autonomous Agricultural Robot Sprayer," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 12(3), September.
    7. Pánková, Ludmila & Aulová, Renata & Jarolímek, Jan, 2020. "Economic Aspects of Precision Agriculture Systems," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 12(3), September.
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    9. Kartal, Serkan & Choudhary, Sunita & Stočes, Michal & Šimek, Pavel & Vokoun, Tomáš & Novák, Vojtěch, 2020. "Segmentation of Bean-Plants Using Clustering Algorithms," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 12(3), September.
    10. Adamides, George, 2020. "Heuristic Evaluation of the User Interface for a Semi-Autonomous Agricultural Robot Sprayer," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 12(3), September.
    11. Žáková Kroupová, Zdeňka & Hálová, Pavlína & Rumánková, Lenka, 2020. "Productivity of Czech Milk Production in European Comparison," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 10(3), September.
    12. Ibe, Rebecca & Rahji, Mohammed & Adeoti, Adetola & Adenegan, Kemisola, 2020. "Household Demand for Fruits and Vegetables in Rural and Urban South-Western Nigeria," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 12(3), September.
    13. Thuy, Phan Thi & Niem, Le Duc & Lebailly, Philippe, 2020. "Recent Evolution of Perennial Crop Farms: Evidence from Dak Lak Province, Vietnam," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 12(3), September.

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    Keywords

    Demand and Price Analysis; Industrial Organization;

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