Cost-Based Model of Seasonal Production, with Application to Milk Policy, A
Milk production is seasonal in many European countries. While quantity seasonality poses capacity management problems for dairy processors, a European Union policy goal is to reduce price seasonality. After developing a model of endogenous seasonality, we study the effects of three E.U. policies on production decisions. These are private storage subsidies, production removals, and production quotas. When cost functions are seasonal in a specified way, then arbitrage opportunities interact with storage subsidies to reduce both price and consumption seasonality. But production seasonality likely increases because storage subsidies promote temporal market integration. Conditions are identified under which product market interventions increase quantity seasonality.
|Date of creation:||14 Jan 2003|
|Publication status:||Published in Journal of Agricultural Economics, July 2003, vol. 54, pp. 285-312|
|Contact details of provider:|| Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070|
Phone: +1 515.294.6741
Fax: +1 515.294.0221
Web page: http://www.econ.iastate.edu
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kimball, Miles S, 1990.
"Precautionary Saving in the Small and in the Large,"
Econometric Society, vol. 58(1), pages 53-73, January.
- Miles S. Kimball, 1989. "Precautionary Saving in the Small and in the Large," NBER Working Papers 2848, National Bureau of Economic Research, Inc.
- Chambers, Robert G & Quiggin, John, 1997. "Separation and Hedging Results with State-Contingent Production," Economica, London School of Economics and Political Science, vol. 64(254), pages 187-209, May.
- Chambers, R.G. & Quiggin, J., 1995. "Separation and Hedging Results with State-Contingent Production," Papers 293, Australian National University - Department of Economics.
- Allen, Douglas W & Lueck, Dean, 1998. "The Nature of the Farm," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 343-386, October.
- Just, Richard E. & Pope, Rulon D., 1978. "Stochastic specification of production functions and economic implications," Journal of Econometrics, Elsevier, vol. 7(1), pages 67-86, February.
- Innes, Robert, 1993. "Two-Season Subsistence Farming, Urban Food Subsidies and Optimal Agricultural Policy," Oxford Economic Papers, Oxford University Press, vol. 45(4), pages 668-690, October.
- Chambers,Robert G., 1988. "Applied Production Analysis," Cambridge Books, Cambridge University Press, number 9780521314275, November.
- Richard J. H. Caine & D. Peter Stonehouse, 1983. "Adjusting the Seasonality of Milk Shipments in Canada: Problems, Economic Impacts and Potential Policies," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 31(3), pages 331-350, November.
- Washington, Andrew A. & Lawson, Robert W. & Kilmer, Richard L., 2000. "An Evaluation of the Effectiveness of the Florida Cooperative's Seasonal Pricing Plan on Seasonal Production Variability," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 32(01), pages 113-121, April.
- Washington, Andrew A. & Lawson, Robert W., Jr. & Kilmer, Richard L., 2000. "An Evaluation Of The Effectiveness Of The Florida Cooperative'S Seasonal Pricing Plan On Seasonal Production Variability," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 32(01), April.
- Saha, Atanu, 1994. "A two-season agricultural household model of output and price uncertainty," Journal of Development Economics, Elsevier, vol. 45(2), pages 245-269, December. Full references (including those not matched with items on IDEAS)