Uncovering Price Patterns in the Raw Milk Markets of Central and Southeast European Countries: Implications for Farm Economic Resilience

We employ state‐space models to analyse the trend, seasonal component and cycle of farmgate milk prices in Balkan countries, namely Greece, Bulgaria and Slovenia, and in Hungary. We split the time span in 2016 to assess whether the dairy policies undertaken until the abolition of the milk quota system have affected the price cycles. We find price cycles of length close to 30 months after 2016, excluding Slovenia, where we find no cycle. Price cycles entail various challenges and opportunities for the actors in the dairy supply chains, and farm expansions may be advantageously adapted to the cycles. The development of appropriate forecasting models accounting for the cyclical price behaviour may provide insight into the sources and responses to the cycles and support policymaking that seeks to enhance the economic resilience of dairy farms and processors.