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Impact of milk price volatility on French dairy farm profitability: A data-driven approach combining econometric modeling and machine learning

Author

Listed:
  • Kedidi, Islem
  • Araujo, Hamilton
  • Randriamarolo, Marie Rose

Abstract

Most french dairy farm are still exposed to volatile milk price despite the implementation of milk package that aim to enforce contractualization and stabilize price. In this context, our study aims to investigate the effect of asymmetric price volatility on french dairy farms' profitability which is necessary to enhance resilience. We use APARCH to measure the volatility of aggregate milk prices represented by the Production Price Index for Agricultural Products. We focused our analysis on 385 dairy farms observed from 2010 to 2022 in the French Farm Accountancy Data Network (FADN). The evolution of farm profitability, indicated by the return on assets, was assessed by using machine learning algorithms. Findings show that there are differentiated effects of milk price volatility on farm profitability.

Suggested Citation

  • Kedidi, Islem & Araujo, Hamilton & Randriamarolo, Marie Rose, 2025. "Impact of milk price volatility on French dairy farm profitability: A data-driven approach combining econometric modeling and machine learning," 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO 360682, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea25:360682
    DOI: 10.22004/ag.econ.360682
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    File URL: https://ageconsearch.umn.edu/record/360682/files/75167_95438_105300_Milk_price_volatility_and_ROA_AAEA_2025_4.pdf
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    References listed on IDEAS

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    1. Bahareh Mosadegh Sedghy & Rémy Lambert & Lota Dabio Tamini, 2016. "Supply response of corn farmers in Quebec: Analyzing the impact of prices volatility?," Cahiers de recherche CREATE 2016-1, CREATE.
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