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Demand for Dairy Products in the EU

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  • Bouamra-Mechemache, Zohra
  • Réquillart, Vincent
  • Soregaroli, Claudio
  • Trévisiol, Audrey

Abstract

In the EU dairy sector, given the remaining high protective tariffs and the quota system, the main factor that drives dairy product market prices is the demand. This paper evaluates the development of demand in the EU and presents estimates of consumption trends and forecasts for the future as well as estimates of elasticity with respect to prices and income in two major EU consumer countries: France and Italy. We use two methods to estimate the development of demand for dairy products, one based on a multi-stage demand system and another based on a single trend equation. The two methods generally lead to the same qualitative results but trend projections are larger using the demand system approach which is based on a shorter data period. This difference is thus partly explained by the fact that high trend projections are not sustainable over a long period. The results show a decreasing consumption of butter and fluid milk and an overall growth in protein and fat consumption. Nevertheless, the increase in fat consumption should be more moderate than the consumption of protein. The results also show that the demand for dairy products is relatively price inelastic but is more sensitive to changes in income (especially for butter and cheese categories). As shown by the use of a partial equilibrium model of dairy markets, the likely impact of the CAP reform strongly depends on the development of demand for dairy products in the EU. More research effort on demand analysis is therefore crucial in order to assess the impact of reforms or trade negotiations more accurately and effectively.
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Suggested Citation

  • Bouamra-Mechemache, Zohra & Réquillart, Vincent & Soregaroli, Claudio & Trévisiol, Audrey, 2007. "Demand for Dairy Products in the EU," IDEI Working Papers 454, Institut d'Économie Industrielle (IDEI), Toulouse.
  • Handle: RePEc:ide:wpaper:7135
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    1. repec:eee:agisys:v:153:y:2017:i:c:p:1-10 is not listed on IDEAS
    2. Burggraf, Christine & Kuhn, Lena & Zhao, Quiran & Teuber, Ramona & Glauben, Thomas, 2015. "Nutrition transition in two emerging countries: A comparison between China and Russia," 2015 Conference, August 9-14, 2015, Milan, Italy 211375, International Association of Agricultural Economists.
    3. Andreas Widenhorn & Klaus Salhofer, 2014. "Price Sensitivity Within and Across Retail Formats," Agribusiness, John Wiley & Sons, Ltd., vol. 30(2), pages 184-194, March.
    4. Klerkx, Laurens & Nettle, Ruth, 2013. "Achievements and challenges of innovation co-production support initiatives in the Australian and Dutch dairy sectors: A comparative study," Food Policy, Elsevier, vol. 40(C), pages 74-89.
    5. Xavier Irz, 2010. "Modeling physical quantities of food and nutrients consumed from aggregate data-with an application to Finland," Agricultural Economics, International Association of Agricultural Economists, vol. 41(3-4), pages 293-304, May.
    6. Stéphan Marette & Jayson L. Lusk & Jutta Roosen, 2010. "Welfare Impact of Information with Experiments: The Crucial Role of the Price Elasticity of Demand," Economics Bulletin, AccessEcon, vol. 30(2), pages 1585-1593.
    7. Klaus Salhofer & Christoph Tribl & Franz Sinabell, 2012. "Market power in Austrian food retailing: the case of milk products," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 39(1), pages 109-122, February.
    8. Céline Bonnet & Zohra Bouamra-Mechemache, 2016. "Organic Label, Bargaining Power, and Profit-sharing in the French Fluid Milk Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(1), pages 113-133.
    9. Widenhorn, Andreas & Salhofer, Klaus, 2014. "Using a Generalized Differenced Demand Model to Estimate Price and Expenditure Elasticities for Milk and Meat in Austria," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 63(2).
    10. Bouamra-Mechemache, Zohra & Ali-Kein, Hela Hadj & Requillart, Vincent, 2006. "Impact of WTO reforms on the world dairy sector," 2006 Annual meeting, July 23-26, Long Beach, CA 21149, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Bouamra-Mechemache, Zohra & Jogeneel, Roel & Requillart, Vincent, 2008. "Removing EU milk quotas, soft landing versus hard landing," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43656, European Association of Agricultural Economists.
    12. Bonnet, Céline & Corre, Tifenn & Réquillart, Vincent, 2015. "Price Transmission in Food Chains: The Case of the Dairy Industry," TSE Working Papers 15-563, Toulouse School of Economics (TSE).
    13. Fabian Bergès & Daniel Hassan & Sylvette Monier-Dilhan, 2013. "Are Consumers More Loyal To National Brands Than To Private Labels?," Bulletin of Economic Research, Wiley Blackwell, vol. 65, pages 1-16, May.

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