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California Milk Marketing Margins

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  • Carman, Hoy F.

Abstract

This article uses monthly price data to estimate farm-retail price response equations for three California market areas. The results indicate that there is a strong direct relationship between retail and farm-level milk prices-retailers increase and decrease their prices equally in response to f.o.b. price increases and decreases. While the total retail response to farm price increases and decreases is equal, the timing of the adjustments is not. Farm price increases during a given month led to retail price increases during the same month while farm price decreases were not fully reflected in retail prices until the following month.

Suggested Citation

  • Carman, Hoy F., 1998. "California Milk Marketing Margins," Journal of Food Distribution Research, Food Distribution Research Society, vol. 29(3), pages 1-6, November.
  • Handle: RePEc:ags:jlofdr:26840
    DOI: 10.22004/ag.econ.26840
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    File URL: https://ageconsearch.umn.edu/record/26840/files/29030001.pdf
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    References listed on IDEAS

    as
    1. Henry W. Kinnucan & Olan D. Forker, 1987. "Asymmetry in Farm-Retail Price Transmission for Major Dairy Products," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(2), pages 285-292.
    2. Daniel H. Pick & Jeffrey Karrenbrock & Hoy F. Carman, 1990. "Price asymmetry and marketing margin behavior: An example for California-Arizona citrus," Agribusiness, John Wiley & Sons, Ltd., vol. 6(1), pages 75-84.
    3. Dale M. Heien, 1980. "Markup Pricing in a Dynamic Model of the Food Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(1), pages 10-18.
    4. James P. Houck, 1977. "An Approach to Specifying and Estimating Nonreversible Functions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 59(3), pages 570-572.
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    Cited by:

    1. Hoy F. Carman & Richard J. Sexton, 2005. "Supermarket fluid milk pricing practices in the western United States," Agribusiness, John Wiley & Sons, Ltd., vol. 21(4), pages 509-530.
    2. Sexton, Richard J. & Xia, Tian & Li, Lan, 2006. "Food Retailers' Pricing and Marketing Strategies, with Implications for Producers," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 35(2), pages 1-18, October.

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