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Outlook for Asian Dairy Markets: The Role of Demographics, Income, and Prices


  • Dong, Fengxia


The paper first presents a 10-year outlook for major Asian dairy markets (China, India, Indonesia, Japan, South Korea, Malaysia, the Philippines, Thailand, and Vietnam) based on a world dairy model. Then, using Heien and Wessellsï¾’s technique, dairy product consumption growth is decomposed into contributions generated by income growth, population growth, price change, and urbanization and these contributions are quantified. Using the world dairy model, the paper also analyzes the impacts of alternative assumptions of higher income levels and technology development in Asia on Asian dairy consumptions and world dairy prices. The outlook projects that Asian dairy consumption will continue to grow strongly in the next decade. The consumption decomposition suggests that the growth would be mostly driven by income and population growth and, as a result, would raise world dairy prices. The simulation results show that technology improvement in Asian countries would dampen world dairy prices and meanwhile boost domestic dairy consumption.

Suggested Citation

  • Dong, Fengxia, 2005. "Outlook for Asian Dairy Markets: The Role of Demographics, Income, and Prices," Staff General Research Papers Archive 12379, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:12379

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    References listed on IDEAS

    1. Campo, Isabelle Schluep & Beghin, John C., 2005. "Dairy Food Consumption, Production, and Policy in Japan," Staff General Research Papers Archive 12406, Iowa State University, Department of Economics.
    2. Ma, Hengyun & Rae, Allan N., 2004. "Projections of Dairy Product Consumption and Trade Opportunities in China," Australasian Agribusiness Review, University of Melbourne, Melbourne School of Land and Environment, vol. 12.
    3. Zhang, Xumin & Kilmer, Richard L. & Muhammad, Andrew, 2003. "A Descriptive Analysis of Hong Kong, Japan, and South Korea Who Import United States Dairy Products," Monographs, University of Florida, International Agricultural Trade and Policy Center, number 15709.
    4. JooHo Song & Daniel A. Sumner, 1999. "Dairy Demand, Supply and Policy in Korea: Potential for International Trade," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 47(5), pages 133-142, December.
    5. Frank H. Fuller & Jikun Huang & Hengyun Ma & Scott Rozelle, 2005. "Rapid Rise of China's Dairy Sector: Factors Behind the Growth in Demand and Supply, The," Food and Agricultural Policy Research Institute (FAPRI) Publications 05-wp394, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
    6. Riethmuller, P. & Chai, J. & Smith, D. & Hutabarat, B. & Sayaka, B., 1999. "The mixing ratio in the Indonesian dairy industry," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 20(1), January.
    7. Frank H. Fuller & John C. Beghin & Dinghuan Hu & Scott Rozelle, 2004. "China's Dairy Market: Consumer Demand Survey and Supply Characteristics," Center for Agricultural and Rural Development (CARD) Publications 04-sr99, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    8. Hall, David C. & Ehui, Simeon K. & Shapiro, Barry I., 2004. "Economic analysis of the impact of adopting herd health control programs on smallholder dairy farms in Central Thailand," Agricultural Economics, Blackwell, vol. 31(2-3), pages 335-342, December.
    9. Sharma, Vijay Paul & Gulati, Ashok, 2003. "Trade liberalization, market reforms and competitiveness of Indian dairy sector," MTID discussion papers 61, International Food Policy Research Institute (IFPRI).
    10. Giannis Karagiannis & Kostas Velentzas, 2004. "Decomposition analysis of consumers' demand changes: an application to Greek consumption data," Applied Economics, Taylor & Francis Journals, vol. 36(5), pages 497-504.
    11. repec:ags:aare05:139308 is not listed on IDEAS
    12. Allan N. Rae, 1997. "Changing food consumption patterns in East Asia: Implications of the trend towards livestock products," Agribusiness, John Wiley & Sons, Ltd., vol. 13(1), pages 33-44.
    13. Murphy, Thomas & Tisdell, Clem, 1996. "An Overview of Trends and Developments in the Thai Dairy Industry," Animal Health Economics 164567, University of Queensland, School of Economics.
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    Cited by:

    1. Campo, Isabelle Schluep & Beghin, John C., 2006. "Japanese Consumer Demand for Dairy Products," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25285, International Association of Agricultural Economists.
    2. Phil Briggs & Carly Harker & Tim Ng & Aidan Yao, 2011. "Fluctuations in the international prices of oil, dairy products, beef and lamb between 2000 and 2008: A review of market-specific demand and supply factors," Reserve Bank of New Zealand Discussion Paper Series DP2011/02, Reserve Bank of New Zealand.
    3. Boniface, Bonaventure & Gyau, Amos & Stringer, Randy, 2009. "Relationship quality as the predictor of long term relationship in the Malaysian dairy industry," MPRA Paper 24420, University Library of Munich, Germany.
    4. Peng, Tingjun & Cox, Thomas L., 2006. "An economic analysis of the impacts of trade liberalization on Asian dairy market," Food Policy, Elsevier, vol. 31(3), pages 249-259, June.
    5. Birthal, Pratap S., 2008. "Linking Smallholder Livestock Producers to Markets: Issues and Approaches," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 63(1).
    6. Jin, Yanhong H. & Lin, Liguo & Yao, Lan, 2011. "Do Consumers Trust the National Inspection Exemption Brands? Evidence from Infant Formula in China," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103766, Agricultural and Applied Economics Association.
    7. Dong, Fengxia, 2006. "The outlook for Asian dairy markets: The role of demographics, income, and prices," Food Policy, Elsevier, vol. 31(3), pages 260-271, June.
    8. Beghin, John C., 2006. "Evolving dairy markets in Asia: Recent findings and implications," Food Policy, Elsevier, vol. 31(3), pages 195-200, June.

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