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Asymmetric Response of Retail Milk Prices in the Northeast Revisited

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  • Daniel Lass

    () (University of Massachusetts)

Abstract

Retail milk price responses to farm price changes were analyzed for Boston, Massachusetts, and Hartford, Connecticut. Prior research concluded asymmetries did not exist in the response of retail fluid milk prices to changes in farm prices. This study finds transmission rates were greater for the Compact period (100 – 120 percent) than the Pre-Compact period (66 – 88 percent). Short-run asymmetries were apparent. Retail prices responded rapidly to farm price increases, but slowly to farm price decreases. This study also finds evidence of long-run asymmetry. When equivalent farm price increases and decreases occur, retail prices do not return to the same levels that were observed before the price changes. Such long-run asymmetry was not observed in prior empirical studies of retail prices in the Northeast.

Suggested Citation

  • Daniel Lass, 2005. "Asymmetric Response of Retail Milk Prices in the Northeast Revisited," Food Marketing Policy Center Research Reports 092, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
  • Handle: RePEc:zwi:fpcrep:092
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    File URL: http://fmpc.uconn.edu/publications/rr/rr92.pdf
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    Citations

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    Cited by:

    1. Bolotova, Yuliya V. & Novakovic, Andrew M., 2015. "An Empirical Analysis of Wholesale Cheese Pricing Practices on the Chicago Mercantile Exchange (CME) Spot Cheese Market," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 18(3).
    2. Rabinowitz, Adam & Liu, Yizao & Chen, Xuan, 2016. "The Impact of Price Regulations on Farm-Retail Price Transmission: The Case of Fluid Milk," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 230095, Southern Agricultural Economics Association.
    3. Mohammad J Alam & Raghbendra Jha, 2016. "Asymmetric threshold vertical price transmission in wheat and flour markets in Dhaka (Bangladesh): seemingly unrelated regression analysis," ASARC Working Papers 2016-03, The Australian National University, Australia South Asia Research Centre.
    4. Bolotova, Yuliya V., 2017. "An Analysis of Retail Fluid Milk Pricing in the Eastern United States," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252744, Southern Agricultural Economics Association.
    5. Ioanna Reziti, 2014. "Price transmission analysis in the Greek milk market," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 64(4), pages 75-86, October-D.
    6. Popović, Rade & Radovanov, Boris & Jeremić, Marija, 2013. "Volatile World Milk Prices and Its Affect to National Market- Case of Serbian Milk Market," 135th Seminar, August 28-30, 2013, Belgrade, Serbia 160393, European Association of Agricultural Economists.

    More about this item

    Keywords

    asymmetry; fluid milk; retail prices; farm-to-retail price margins;

    JEL classification:

    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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