IDEAS home Printed from https://ideas.repec.org/p/ags/aaea12/124939.html
   My bibliography  Save this paper

Economic Analysis of the U.S. Fluid Milk Industry

Author

Listed:
  • Cai, Xiaowei
  • Stiegert, Kyle W.

Abstract

In the literature, mixed results have been obtained from the studies that have examined the market power of dairy cooperatives and processors. As the main objective of the present work, we intend to find further empirical evidence to investigate whether the dairy cooperatives’ oligopoly power that is implicit in the dynamic pricing games exists and how it influences the beverage milk margins from 1983 to 2012. We studied three regional markets: California, New York and Wisconsin. In all regions, we found clear evidence of alternating high- and low-margin regimes during the study years which indicates slight departures from perfect competition in the U.S. fluid milk market. But the levels of departure vary across different states.

Suggested Citation

  • Cai, Xiaowei & Stiegert, Kyle W., 2012. "Economic Analysis of the U.S. Fluid Milk Industry," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124939, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea12:124939
    DOI: 10.22004/ag.econ.124939
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/124939/files/AAEA%202012%20Cai%20and%20Stiegert.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.124939?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hayley H. Chouinard & David E. Davis & Jeffrey T. LaFrance & Jeffrey M. Perloff, 2010. "Milk Marketing Order Winners and Losers," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 32(1), pages 59-76.
    2. Robert Romain & Maurice Doyon & Mathieu Frigon, 2002. "Effects of state regulations on marketing margins and price transmission asymmetry: Evidence from the New York City and upstate New York fluid milk markets," Agribusiness, John Wiley & Sons, Ltd., vol. 18(3), pages 301-315.
    3. Pierre R. Mérel, 2009. "Measuring market power in the French Comté cheese market," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 36(1), pages 31-51, March.
    4. Thomas L. Cox & Jean-Paul Chavas, 2001. "An Interregional Analysis of Price Discrimination and Domestic Policy Reform in the U.S. Dairy Sector," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(1), pages 89-106.
    5. Green, Edward J & Porter, Robert H, 1984. "Noncooperative Collusion under Imperfect Price Information," Econometrica, Econometric Society, vol. 52(1), pages 87-100, January.
    6. Metin Cakir & Joseph V. Balagtas, 2012. "Estimating Market Power of U.S. Dairy Cooperatives in the Fluid Milk Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(3), pages 647-658.
    7. Prasertsri, Peerapon & Kilmer, Richard L., 2008. "The Bargaining Strength of a Milk Marketing Cooperative," Agricultural and Resource Economics Review, Cambridge University Press, vol. 37(2), pages 204-210, October.
    8. Dilip Abreu & David Pearce & Ennio Stacchetti, 1997. "Optimal Cartel Equilibria with Imperfect monitoring," Levine's Working Paper Archive 632, David K. Levine.
    9. Liu, Donald J. & Sun, Chin-Hwa & Kaiser, Harry M., 1995. "Market Conduct Under Government Price Intervention In The U.S. Dairy Industry," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(2), pages 1-15, December.
    10. Abreu, Dilip & Pearce, David & Stacchetti, Ennio, 1986. "Optimal cartel equilibria with imperfect monitoring," Journal of Economic Theory, Elsevier, vol. 39(1), pages 251-269, June.
    11. Xiaowei Cai & Kyle Stiegert & Stephen Koontz, 2011. "Regime switching and oligopsony power: the case of U.S. beef processing," Agricultural Economics, International Association of Agricultural Economists, vol. 42(1), pages 99-109, January.
    12. Mailath, George J. & Samuelson, Larry, 2006. "Repeated Games and Reputations: Long-Run Relationships," OUP Catalogue, Oxford University Press, number 9780195300796.
    13. Vardges Hovhannisyan & Brian W. Gould, 2012. "A Structural Model of the Analysis of Retail Market Power: The Case of Fluid Milk," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(1), pages 67-79.
    14. Ollinger, Michael & Nguyen, Sang V. & Blayney, Donald P. & Chambers, William & Nelson, Kenneth B., 2005. "Structural Change in the Meat, Poultry, Dairy and Grain Processing Industries," Economic Research Report 7217, United States Department of Agriculture, Economic Research Service.
    15. Hamilton, James D, 1989. "A New Approach to the Economic Analysis of Nonstationary Time Series and the Business Cycle," Econometrica, Econometric Society, vol. 57(2), pages 357-384, March.
    16. Prasertsri, Peerapon & Kilmer, Richard L., 2008. "The Bargaining Strength of a Milk Marketing Cooperative," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 37(2), pages 1-7.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fabra, Natalia & Toro, Juan, 2005. "Price wars and collusion in the Spanish electricity market," International Journal of Industrial Organization, Elsevier, vol. 23(3-4), pages 155-181, April.
    2. Fudenberg, Drew & Yamamoto, Yuichi, 2011. "Learning from private information in noisy repeated games," Journal of Economic Theory, Elsevier, vol. 146(5), pages 1733-1769, September.
    3. Tarui, Nori & Mason, Charles F. & Polasky, Stephen & Ellis, Greg, 2008. "Cooperation in the commons with unobservable actions," Journal of Environmental Economics and Management, Elsevier, vol. 55(1), pages 37-51, January.
    4. Cheng, Long & McDonald, Stuart & Ye, Guangliang, 2023. "Cartelization under present bias and imperfect public signals," Mathematical Social Sciences, Elsevier, vol. 123(C), pages 77-86.
    5. Batlome Janjgava & Sergey Slobodyan, 2011. "Duopoly Competition, Escape Dynamics and Non-cooperative Collusion," CERGE-EI Working Papers wp445, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    6. Osório-Costa, António M., 2009. "Efficiency Gains in Repeated Games at Random Moments in Time," MPRA Paper 13105, University Library of Munich, Germany.
    7. Richards, Timothy J. & Patterson, Paul M., 2004. "Causes of retail price fixity: an empirical analysis," Journal of Economics and Business, Elsevier, vol. 56(2), pages 117-136.
    8. Hongbin Cai & Ichiro Obara, 2009. "Firm reputation and horizontal integration," RAND Journal of Economics, RAND Corporation, vol. 40(2), pages 340-363, June.
    9. Osório Costa, Antonio Miguel, 2012. "The Limits of Discrete Time Repeated Games:Some Notes and Comments," Working Papers 2072/203171, Universitat Rovira i Virgili, Department of Economics.
    10. Bethune, Zachary & Hu, Tai-Wei & Rocheteau, Guillaume, 2018. "Indeterminacy in credit economies," Journal of Economic Theory, Elsevier, vol. 175(C), pages 556-584.
    11. Bård Harstad & Francesco Lancia & Alessia Russo, 2019. "Compliance Technology and Self-enforcing Agreements," Journal of the European Economic Association, European Economic Association, vol. 17(1), pages 1-29.
    12. Even Comfort Hvinden, 2019. "OPEC's crude game," Working Papers No 10/2019, Centre for Applied Macro- and Petroleum economics (CAMP), BI Norwegian Business School.
    13. Osório Costa, Antonio Miguel, 2011. "Public Monitoring with Uncertainty in the Time Repetitions," Working Papers 2072/179668, Universitat Rovira i Virgili, Department of Economics.
    14. Osório-Costa, António M., 2009. "Frequent Monitoring in Repeated Games under Brownian Uncertainty," MPRA Paper 13104, University Library of Munich, Germany.
    15. Maximilian Koppenberg, 2023. "Markups, organic agriculture and downstream concentration at the example of European dairy farmers," Agricultural Economics, International Association of Agricultural Economists, vol. 54(2), pages 161-178, March.
    16. Francesco Lancia & Alessia Russo, 2016. "Cooperation in Organization through Self-Commitment Actions," Vienna Economics Papers 1605, University of Vienna, Department of Economics.
    17. Kloosterman, Andrew, 2015. "Public information in Markov games," Journal of Economic Theory, Elsevier, vol. 157(C), pages 28-48.
    18. Francesco Lancia & Alessia Russo, 2016. "Cooperation in Organization through Self-Commitment Actions," Vienna Economics Papers vie1605, University of Vienna, Department of Economics.
    19. Juan‐Pablo Montero & Juan Ignacio Guzman, 2010. "Output‐Expanding Collusion In The Presence Of A Competitive Fringe," Journal of Industrial Economics, Wiley Blackwell, vol. 58(1), pages 106-126, March.
    20. Kaplow, Louis & Shapiro, Carl, 2007. "Antitrust," Handbook of Law and Economics, in: A. Mitchell Polinsky & Steven Shavell (ed.), Handbook of Law and Economics, edition 1, volume 2, chapter 15, pages 1073-1225, Elsevier.

    More about this item

    Keywords

    Agribusiness;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaea12:124939. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.