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Population Dynamics And Milk Supply Response In The Us Lake States

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  • J.‐P. Chavas
  • A. F. Kraus

Abstract

This paper develops a dynamic model of a dairy cow population and of milk supply response. When applied to the US Lake States, the model provides evidence against the Nerlovian model. It suggests that the pattern of dynamic effects of prices on cow numbers varies for different prices. The estimated dynamic supply elasticities provide some useful information on the nature of dairy production adjustments. For example, the response of milk supply to market prices is found to be very inelastic in the short run. It takes at least 7 years of sustained change to obtain an elastic response to milk price. Also, feed price and slaughter cow price are found to have smaller effects on dairy supply than milk price, but larger effects than risk, hay price or capital cost.

Suggested Citation

  • J.‐P. Chavas & A. F. Kraus, 1990. "Population Dynamics And Milk Supply Response In The Us Lake States," Journal of Agricultural Economics, Wiley Blackwell, vol. 41(1), pages 75-84, January.
  • Handle: RePEc:bla:jageco:v:41:y:1990:i:1:p:75-84
    DOI: 10.1111/j.1477-9552.1990.tb00620.x
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    File URL: https://doi.org/10.1111/j.1477-9552.1990.tb00620.x
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    References listed on IDEAS

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    1. Jean-Paul Chavas & Richard M. Klemme, 1986. "Aggregate Milk Supply Response and Investment Behavior on U.S. Dairy Farms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(1), pages 55-66.
    2. Marc Nerlove, 1958. "Adaptive Expectations and Cobweb Phenomena," The Quarterly Journal of Economics, Oxford University Press, vol. 72(2), pages 227-240.
    3. Bruce Traill & David Colman & Trevor Young, 1978. "Estimating Irreversible Supply Functions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 60(3), pages 528-531.
    4. Rudolf Wolffram, 1971. "Positivistic Measures of Aggregate Supply Elasticities: Some New Approaches—Some Critical Notes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 53(2), pages 356-359.
    5. Gallant, A. Ronald, 1975. "Seemingly unrelated nonlinear regressions," Journal of Econometrics, Elsevier, vol. 3(1), pages 35-50, February.
    6. William Lin, 1977. "Measuring Aggregate Supply Response under Instability," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 59(5), pages 903-907.
    7. Dean Chen & Richard Courtney & Andrew Schmitz, 1972. "A Polynomial Lag Formulation of Milk Production Response," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 54(1), pages 77-83.
    8. Lutkepohl, Helmut, 1981. "A model for non-negative and non-positive distributed lag functions," Journal of Econometrics, Elsevier, vol. 16(2), pages 211-219, June.
    9. A. J. Rayner & R. J. Young, 1980. "Information, hierarchical model structures and forecasting: A case study of the stock of dairy cows in England and Wales," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 7(3), pages 289-313.
    10. Harlow W. Halvorson, 1958. "The Response of Milk Production to Price," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 40(5), pages 1101-1113.
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    Cited by:

    1. Muhammad Akmal, 1994. "The Production and Consumption of Livestock Foods in Pakistan: A Look into the Future," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 33(1), pages 19-39.
    2. Muhammad Akmal, 1993. "A Dynamic Model of Milk Production Response for Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 32(4), pages 873-884.
    3. Marin Bozic & Brian W. Gould, 2009. "Has Price Responsiveness of U.S. Milk Supply Decreased?," Working Papers 0902, The Institute of Economics, Zagreb.
    4. Bozic, Marin & Gould, Brian W., 2009. "The Dynamics of the U.S. Milk Supply: Implications for Changes in U.S. Dairy Policy," Staff Papers 53818, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.
    5. Mohammad Pervez Wasim, 2005. "Milk Production Response in Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 10(1), pages 105-121, Jan-Jun.

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