IDEAS home Printed from https://ideas.repec.org/p/ags/uersab/309708.html
   My bibliography  Save this paper

Determinants of the Farm-To-Retail Milk Price Spread

Author

Listed:
  • Hansen, Brandon
  • Hahn, William
  • Weimar, Mark

Abstract

Farm-to-retail milk price spreads increased significantly during late 1990 and early 1991 as farm prices decreased while retail prices either stayed the same or else went down more slowly. In this report, farm-level fluid milk prices and processor costs are estimated from USDA's Agricultural Marketing Service data and from firm level data acquired from a private cost-accounting company for the period 1974-91. These data indicate that the greatest portion of the farm-to-retail price spread increase occurred at the retailer level. Processor profits also increased but not enough to account for the increased price spread. Comparisons of the fluid milk price spread with other food price spreads indicate that the milk price spread had lagged behind other food price spreads since 1986 but then caught up in 1990 and 1991. A study of price transmission between 1983 and 1990 indicates that retail prices react more quickly and completely to farm price increases than to farm price decreases.

Suggested Citation

  • Hansen, Brandon & Hahn, William & Weimar, Mark, 1994. "Determinants of the Farm-To-Retail Milk Price Spread," Agricultural Information Bulletins 309708, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersab:309708
    DOI: 10.22004/ag.econ.309708
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/309708/files/aib693.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.309708?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
    ---><---

    References listed on IDEAS

    as
    1. Hahn, William F., 1990. "Price Transmission Asymmetry in Pork and Beef Markets," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 42(4), pages 1-10.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. Frigon, Mathieu & Doyon, Maurice & Romain, Robert F.J., 1999. "Asymmetry in Farm-Retail Price Transmission in the Northeastern Fluid Milk Market," Research Reports 25220, University of Connecticut, Food Marketing Policy Center.

    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. Joseph, Kishore & Garcia, Philip & Peterson, Paul E., 2016. "Does the Boxed Beef Price Inform the Live Cattle Futures Price?," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236166, Agricultural and Applied Economics Association.
    2. Capps, Oral, Jr. & Sherwell, Pablo, 2005. "Spatial Asymmetry in Farm-Retail Price Transmission Associated with Fluid Milk Products," 2005 Annual meeting, July 24-27, Providence, RI 19316, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Goodwin, Barry K. & Harper, Daniel C., 2000. "Price Transmission, Threshold Behavior, And Asymmetric Adjustment In The U.S. Pork Sector," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 32(3), pages 1-11, December.
    4. Fousekis Panos, 2008. "Further Results on Asymmetry in Farm-Retail Price Transmission under Spatial Monopoly," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 6(1), pages 1-11, August.
    5. Mkhabela, Thulasizwe S. & Nyhodo, Bonani, 2011. "Farm and Retail Prices in the South African Poultry Industry: Do the Twain Meet?," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 14(3), pages 1-20, September.
    6. Lizano, Víctor Rodríguez & Vega, Mercedes Montero, 2016. "Costa Rican Meat Value Chain Description: Price Transmission As A Tool," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 4(3), pages 1-11, July.
    7. Bathla, Seema & Srinivasulu, R., 2011. "Price Transmission and Asymmetry: An Empirical Analysis of Indian Groundnut Seed and Oil Markets," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 66(4), pages 1-16.
    8. Hosseini, Seyed Safdar & Nikoukar, Afsaneh & Dourandish, Arash, 2012. "Price Transmission Analysis in Iran Chicken Market," International Journal of Agricultural Management and Development (IJAMAD), Iranian Association of Agricultural Economics, vol. 2(4).
    9. Ben Kaabia, Monia & Gil, Jose Maria & Boshnjaku, L., 2002. "Price Transmission Asymmetries in the Spanish Lamb Sector," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24908, European Association of Agricultural Economists.
    10. Pan, Suwen & Mohanty, Samarendu & Fadiga, Mohamadou L., 2003. "Price Relationships In The U.S. Fiber Markets: Its Implications For Cotton Industry," 2003 Annual meeting, July 27-30, Montreal, Canada 22138, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Hahn, William F. & Green, Richard D., 2000. "Joint Costs In Meat Retailing," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(1), pages 1-19, July.
    12. Monia Ben-Kaabia & José M. Gil & Mehrez Ameur, 2005. "Vertical integration and non-linear price adjustments: The Spanish poultry sector," Agribusiness, John Wiley & Sons, Ltd., vol. 21(2), pages 253-271.
    13. Henry de-Graft Acquah, 2013. "A Bootstrap Approach to Evaluating the Power of the Houck’s Test for Asymmetry," Journal of Social and Development Sciences, AMH International, vol. 4(2), pages 69-73.
    14. Barry K. Goodwin & Matthew T. Holt, 1999. "Price Transmission and Asymmetric Adjustment in the U.S. Beef Sector," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 630-637.
    15. Liu, Yamei, 2000. "Overfitting and forecasting: linear versus non-linear time series models," ISU General Staff Papers 2000010108000014914, Iowa State University, Department of Economics.
    16. Ogundeji, A. & Mare, F.A., 2018. "Price Transmission in the Beef Value Chain – The Case of Bloemfontein, South Africa," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 275930, International Association of Agricultural Economists.
    17. Ben Kaabia, Monia & Gil, Jose Maria, 2005. "Asymetric Price Transmission in the Spanish Lamb Sector," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24631, European Association of Agricultural Economists.
    18. Aguero, Jorge M., 2004. "Asymmetric Price Adjustments And Behavior Under Risk: Evidence From Peruvian Agricultural Markets," 2004 Annual meeting, August 1-4, Denver, CO 20394, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    19. Teresa Serra & Barry Goodwin, 2003. "Price transmission and asymmetric adjustment in the Spanish dairy sector," Applied Economics, Taylor & Francis Journals, vol. 35(18), pages 1889-1899.
    20. Oral Capps & Pablo Sherwell, 2007. "Alternative approaches in detecting asymmetry in farm-retail price transmission of fluid milk," Agribusiness, John Wiley & Sons, Ltd., vol. 23(3), pages 313-331.

    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:uersab:309708. 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/ersgvus.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.