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Retail Dairy Prices Fluctuate With Farm Value of Milk

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  • Stewart, Hayden
  • Blayney, Donald P.

Abstract

Farm milk prices in the United States fluctuated throughout the 2000-2009 decade. Dairy farmers, industry pundits, and policymakers all reacted with much alarm. One point of concern has been the response of retail prices to farm price volatility. This study investigates farm-to-retail price transmission for two major dairy products – whole milk and Cheddar cheese – in the 2000s. Results show that price shocks at the farm gate were transmitted asymmetrically to retail. However, in order to best identify the nature of the transmission process, it is important to fit alternative model specifications.
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Suggested Citation

  • Stewart, Hayden & Blayney, Donald P., 2009. "Retail Dairy Prices Fluctuate With Farm Value of Milk," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, pages 1-1, December.
    • Handle: RePEc:ags:uersaw:122574
    DOI: 10.22004/ag.econ.122574
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    Cited by:

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    2. William Hahn & Hayden Stewart & Donald P. Blayney & Christopher G. Davis, 2016. "Modeling price transmission between farm and retail prices: a soft switches approach," Agricultural Economics, International Association of Agricultural Economists, vol. 47(2), pages 193-203, March.
    3. Tejeda, Hernan A. & Kim, Man-Keun, 2020. "Dynamic price relationships and price discovery among cheese markets," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 24(1), September.
    4. Maria de Fátima Oliveira & Maria Leonor da Silva Carvalho & Maria Raquel Lucas & Pedro Damião Henriques, 2014. "Price Transmission in the Milk Portuguese Market," CEFAGE-UE Working Papers 2014_19, University of Evora, CEFAGE-UE (Portugal).
    5. Stewart, Hayden & Don, P. Blayney, 2011. "Retail Dairy Prices Fluctuate with the Farm Value of Milk," Agricultural and Resource Economics Review, Cambridge University Press, vol. 40(2), pages 201-217, September.
    6. Zuzana LAJDOVÁ & Peter BIELIK, 2015. "The evidence of asymmetric price adjustments," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 61(3), pages 105-115.
    7. Loy, Jens-Peter & Holm, Thore & Steinhagen, Carsten, 2012. "Vertical Price Transmission In Differentiated Product Markets: A Disaggregated Study For Milk And Butter," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 123284, Agricultural and Applied Economics Association.
    8. Ioanna Reziti, 2014. "Price transmission analysis in the Greek milk market," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 64(4), pages 75-86, October-D.
    9. Piotr Borawski & Beata Kalinowska & Bartosz Mickiewicz & Andrzej Parzonko & Bogdan Klepacki & James Willam Dunn, 2021. "Changes in the Milk Market in the United States on the Background of the European Union and the World," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 1), pages 1010-1033.
    10. Judith Hillen, 2021. "Vertical price transmission in Swiss dairy and cheese value chains," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 9(1), pages 1-21, December.
    11. Dong, Diansheng & Stewart, Hayden, 2013. "Households' Choices Among Fluid Milk Products: What Happens When Income and Prices Change?," Economic Research Report 262226, United States Department of Agriculture, Economic Research Service.
    12. 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.
    13. Mai, Thang Chien & Shakur, Shamim & Cassells, Sue, 2016. "Price Asymmetry of Coffee Beans: Evidence from Vietnam," 2016 Conference, August 25-26, Nelson, New Zealand 260807, New Zealand Agricultural and Resource Economics Society.
    14. Holm, T. & Loy, J.-P. & Steinhagen, C., 2013. "Bio auch bei der Preissetzung: Konsummilch in Deutschland," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 48, March.
    15. Holm, Thore & Loy, Jens-Peter & Steinhagen, Carsten, 2012. "Bio Auch Bei Der Preissetzung: Konsummilch In Deutschland," 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 137159, German Association of Agricultural Economists (GEWISOLA).
    16. T. Weldesenbet, 2013. "Asymmetric price transmission in the Slovak liquid milk market," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 59(11), pages 512-524.
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    18. 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.
    19. Lorena de Oliveira, Maria de Fátima & da Silva Carvalho, Maria Leonor & Raquel Lucas, Maria & Damião Henriques, Pedro & Mora Peixe, Fernanda, 2015. "Price Transmission on the Milk Portuguese Market," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 16(1), pages 1-12.
    20. Henry Leung & Frank Furfaro, 2020. "Comovement of dairy product futures and firm value: returns and volatility," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3), pages 632-654, July.

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