Milk production related to price of raw cow’s milk in selected european countries

Ján Buleca,Viliam Kováč,Nikola Šubová

doi:10.5219/1002

Abstract

Dairy industry and its production contributes to the economies of many regions and countries worldwide. Except the milk production there is also number of other impacts such as the human nutrition, landscape creation and environment among the others. The European dairy sector undergoes numerous changes a period of crises and regulations in last few decades. After abolition of milk quota system, the European milk producing countries started to be exposed to the milk prices of the world market. In the submitted article, the impact of five explanatory variables, which cow's milk, butter, milk powder, cheese, and farm milk production belong among, is analysed to the explained variable the price of raw cow's milk coming from the countries whose data is available in the Eurostat database; that is, Austria, Belgium, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. Regression analysis of panel data with territorial and time dimensions is applied using three techniques, which the pooling, the random, and the between approach belong to. Supplementary analytical approach represented by the cluster analysis resulted into triplet of clusters, selected for the further modelling process. Results of the regression analysis showed no influence of butter production to the level of raw cow's milk. The visualised outcome signifies the distribution of the individual countries among the examined clusters. It underlines the fact that the cheaper raw cow's milk price causes a concentration on the specific part of the production that is easier to produce. It is important to realise that the coefficient of determination of the regression models reveal their statistical significance as a whole. Obtained results can serve as the background for further analysis of impact of other milk products as the factors influencing the raw cow's milk prices.

Highlights

Dairy represents important industry in many European countries, for production of milk and milk products, and for its contribution to the landscape creation and environment.Growing consumption of dairy and other livestock products is bringing important nutritional benefits to large segments of the population worldwide
Obtained results can serve as the background for further analysis of impact of other milk products as the factors influencing the raw cow’s milk prices
It produces 15% of all agricultural revenues of the European Union. This production creates a quarter of the worlds milk production and its dairy products are exported all over the world but 87% of all dairy production is consumed by european households

Summary

Introduction

Dairy represents important industry in many European countries, for production of milk and milk products, and for its contribution to the landscape creation and environment.Growing consumption of dairy and other livestock products is bringing important nutritional benefits to large segments of the population worldwide. For the last fifty years, the dairy sector in most developed countries has shifted towards bigger herd size and significantly higher annual milk production per cow. The European dairy sector is characterised by 600,000 dairy farms, 12,000 processing facilities and 300,000 jobs It produces 15% of all agricultural revenues of the European Union. This production creates a quarter of the worlds milk production and its dairy products are exported all over the world but 87% of all dairy production is consumed by european households. This European Union sector has many strengths.

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