A Fourier-based approach to understanding the impact of dairy farming on red meat prices: evidence from the Turkish case

Abstract

PurposeThe purpose of this study is to investigate the drivers behind the notable increase in red meat prices in Turkey, attributing the rise primarily to policy interventions within the dairy industry which result in a reduction of farm capacity for dairy farmers.Design/methodology/approachTo analyze the factors that determine the price of carcass red meat, cattle fattening feed is identified as a variable that directly affects carcass pricing, while the ratio of farm gate milk prices to milk feed prices is assumed to have an indirect impact. Monthly data from January 2011 to December 2022 are used in the analysis. The time series examined is influenced by time-dependent nonlinear Fourier trends that are computed for use in the estimation part.FindingsThe study reveals that fluctuations in cattle fattening feed prices have an immediate impact on carcass prices, while changes in the ratio of raw milk prices to milk feed prices exhibit a time lag. Although short-term interventions to the farm gate milk prices can initially suppress carcass prices, it is important to consider their medium and long-term effects, as these can manifest as a decrease in the number of animals available.Originality/valueThe research sheds light on the intricate interplay between policy interventions in the dairy sector and their ripple effects on the broader red meat market, contributing valuable insights to both academic and policy discourse.