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A PowerPoint® Deconstruction of the Farm and Retail Price Analysis Presented in "The Public Interest and Private Economic Power: A Case study of the Northeast Dairy Compact"

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  • Cotterill, Ronald
  • Andrew, Franklin

Abstract

In this paper we interpret and explain in more detail the economic analysis contained in our report, The Public Interest and Private Economic Power: A Case Study of the Northeast Dairy Compact. This paper contains a graphic deconstruction of the price analysis that is presented in that report. It also focuses on evidence for the conclusions that Stop & Shop was a price leader in the market power game and that Garelick and private label demand are sufficiently inelastic to support a leadership role for Suiza Foods Inc. Before moving directly to the Report, let us briefly look more generally at the issue of farm-to-retail price transmission in milk markets. Figure 1 displays the retail price and the farm level price for the San Francisco market area. Note how fluctuation in the farm level price is transmitted forward to fluctuation in the retail price in a fairly regular and consistent fashion. This is a textbook example of how farm prices in a competitive channel affect retail prices.

Suggested Citation

  • Cotterill, Ronald & Andrew, Franklin, 2001. "A PowerPoint® Deconstruction of the Farm and Retail Price Analysis Presented in "The Public Interest and Private Economic Power: A Case study of the Northeast Dairy Compact"," Issue Papers 169378, University of Connecticut, Food Marketing Policy Center.
    • Handle: RePEc:ags:ucofmi:169378
    DOI: 10.22004/ag.econ.169378
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    References listed on IDEAS

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    1. Cotterill, Ronald & Brundage, Michael, 2001. "Competition, or the Lack Thereof in Local Fluid Milk Markets: San Francisco, Seattle, Chicago, Miami and Dallas-Forth Worth," Issue Papers 169377, University of Connecticut, Food Marketing Policy Center.
    2. Cotterill, Ronald W. & Dhar, Tirtha Pratim & Franklin, Andrew W., 1999. "Post Merger Price Conduct: A Case Study of Pricing in Connecticut Markets After the 1996 Royal Ahold-Stop & Shop Merger," Research Reports 25198, University of Connecticut, Food Marketing Policy Center.
    3. Ronald W. Cotterill & Andrew W. Franklin & Li Yu Ma, 1996. "Measuring Market Power Effects in Differentiated Product Industries: An Application to the Soft Drink Industry," Food Marketing Policy Center Research Reports 032, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    4. Ronald W. Cotterill & Michael F. Brundage, 2001. "Competition, or the Lack Thereof in Local Fluid Milk Markets: San Francisco, Seattle, Chicago, Miami and Dallas-Forth Worth," Issue Papers 21, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
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    Cited by:

    1. Ronald W. Cotterill, 2003. "The Impact of the Northeastern Dairy Compact on New England Consumers: A Report from the Milk Policy Wars," Food Marketing Policy Center Research Reports 077, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    2. Ronald W. Cotterill, 2005. "The impact of the Northeast Dairy Compact on New England consumers: A report from the milk policy wars," Agribusiness, John Wiley & Sons, Ltd., vol. 21(4), pages 455-471.
    3. Ronald W. Cotterill, 2002. "An Antitrust Economic Analysis of Stop & Shop's Proposed Acquisition of the Big V Shop Rite Supermarket Chain," Food Marketing Policy Center Research Reports 063, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.

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