Greek milk price decomposition

Abstract

The aim of this paper is to analyse the Greek cow milk farm gate price, compare it with German and Irish prices and make an out of sample forecast for the year 2017. For this purpose, the milk price time series are modelled using the state space methods and they are decomposed into a trend, a seasonal and a cyclical component. The results show that there is an increase in the price fluctuations. The Greek milk price becomes more seasonal and cyclical while the duration of the cycles is relatively stable. Finally, conclusions are drawn about the connection of the cycles of the milk price time series and the milk production and quotas.