Retail Milk Prices Research Articles

Using threshold co-integration to estimate asymmetric price transmission in the Turkish milk market

We investigate the price dynamics between retail milk price and raw milk price in the Turkish fluid milk market. The study uses monthly fluid milk prices for 14 years between January 2003 and December 2016. We analyze the price adjustment in the fluid milk market through an asymmetric error correction model with threshold co-integration. We find that the transmission between the two prices has been asymmetric in both the long term and short term period. Differences between the farm milk prices and retail milk prices may exist due to marketing costs across the supply chain and pricing policies associated with the market structure. Results of the long-run analysis indicate a significant market power in the fluid milk market. Therefore, in this asymmetric case, the deviations are likely to be the reason for the market power of the processors/retailers and the reason for the oligopolistic market structure in the sector.

Vertical and spatial price transmission in the Mexican and international milk market

During the last two decades, the Mexican dairy sector experienced important structural changes, especially after the implementation of the NAFTA agreement. In 2016, the Bank of Mexico observed that in milk market, the final prices tend to rise when input prices increase, however; they do not decrease when input prices decrease. In this context, this study examines the degree of spatial and vertical price transmission between farm milk prices and international milk prices as well as between farm milk prices and retail milk prices, in order to assess the efficiency level of the Mexican and international dairy market. The findings of this research provide contributions to decision makers and industry stake-holders: a unidirectional transmission of international milk prices to domestic milk prices and from farm price to retail price along with the existence of asymmetric price transmission which depends on whether milk prices are increasing or decreasing. The results have shown that a long-run single co-integration relationship exists between international and farmer’s prices and between retail and farm price; that the direction of price transmission tends to go from producers to retailers and from international to farmer price and that when international price increase the speed of adjustment tend to be significantly slower, and that when international price decrease, the speed of adjustment tend to be significantly faster.

The Dairy Industry in Viet Nam: A Value Chain Approach

Vietnam lies in the area of highest economic and milk consumption growth in the world. Vietnam also increased milk yield reached the second highest in Asia with output milk consumption is increasing rapidly. However, the dairy industry in the country only satisfies more than 20% of the domestic consumption, the rest is imported from foreign. The retail milk price in Vietnam is very high; however, the raw milk prices relatively low. One explanation is the monopoly of the dairy processor in Vietnam. Three largest processors own 75% of the dairy market. They take advantage in the negotiation with farmers and actively increase the retiling price. Recently, such investigations on the processor by government officers do not take any effect in the dairy market. There is no rule controlling the increase in price yet the own suffer a lot is the final consumer. The main objective of this paper is providing a close look to value chain and its application in the dairy industry in Vietnam. The authors would offer some solutions to increase the value added in the dairy value chain and improvement in the income distribution in this value chain.

The Impact of Regulatory Change on Retail Pricing: The New York State Milk Price Gouging Law

This study examines the causal effect of a change in administration of the New York State milk price gouging law on retail milk prices. Specifically, we focus on the November 2008 shift from a threshold pricing policy that consisted of monthly announced prices to a fixed margin policy. Using a regression discontinuity approach, we find lower prices and thus increased consumer welfare for retail milk purchasers in New York State. Furthermore, the change in application of the law may have eliminated previously hypothesized coordination in pricing by retailers through a more competitive retail milk environment.

The Impact of the New York State Milk Price Gouging Law on the Price Transmission Process and Supermarket Pricing Strategies in the Fluid Whole Milk Market

The paper analyzes the effect of the New York State Milk Price Gouging Law 200% rule (June 1991-October 2008) on the nature of price-transmission process and supermarket pricing strategies in the fluid whole milk market. This rule established that the retail prices of fluid milk products were not to exceed 200% of the Class I fluid milk prices that milk processors paid to dairy farmers. The enforcement of this law significantly affected the nature of the Class I fluid milk price transmission process and the whole milk pricing strategies of supermarkets in the five largest cities in New York State: New York City, Albany, Syracuse, Buffalo and Rochester. During the pre-law period, supermarkets used the retail price-stabilization strategy; a presence of the asymmetric Class I fluid milk price transmission process was evidence of this type of pricing strategy. In contrast, supermarkets used the retail profit stabilization strategy during the law period, which was reflected in the symmetric response of retail prices and marketing margins to increases and decreases in the Class I fluid milk prices. The analyzed design of retail milk price control actually created an institutional environment that facilitated cooperative conduct of supermarkets acting in an oligopolistic market environment, which caused a shift away from the retail price stabilization strategy in the pre-law period to the retail profit stabilization strategy in the law period.

The Impact of the New York State Milk Price Gouging Law on the Price-Transmission Process and Supermarket Pricing Strategies in the Fluid Whole Milk Market

The paper analyzes the effect of the New York State Milk Price Gouging Law 200% rule (June 1991-October 2008) on the nature of price-transmission process and supermarket pricing strategies in the fluid whole milk market. This rule established that the retail prices of fluid milk products were not to exceed 200% of the Class I fluid milk prices that milk processors paid to dairy farmers. The enforcement of this law significantly affected the nature of the Class I fluid milk price transmission process and the whole milk pricing strategies of supermarkets in the five largest cities in New York State: New York City, Albany, Syracuse, Buffalo and Rochester. During the pre-law period, supermarkets used the retail price-stabilization strategy; a presence of the asymmetric Class I fluid milk price transmission process was evidence of this type of pricing strategy. In contrast, supermarkets used the retail profit stabilization strategy during the law period, which was reflected in the symmetric response of retail prices and marketing margins to increases and decreases in the Class I fluid milk prices. The analyzed design of retail milk price control actually created an institutional environment that facilitated cooperative conduct of supermarkets acting in an oligopolistic market environment, which caused a shift away from the retail price stabilization strategy in the pre-law period to the retail profit stabilization strategy in the law period.

The Effect of the New York State Milk Price Gouging Law on the Performance of Fluid Whole Milk Market: An Empirical Analysis

The paper analyses the effect of the NYS Milk Price Gouging Law 200% rule (June 1991-October 2008) on the behavior of retail prices and marketing margins of fluid whole milk products sold in the largest New York State cities (New York City, Albany, Syracuse, Buffalo and Rochester). This rule established that retail prices of fluid milk products were not to exceed 200% of Class I fluid milk prices that milk processors paid for raw milk to dairy farmers. The law was enforced by the NYS Department of Agriculture and Markets (NYSDAM) by announcing the maximum retail price thresholds on a monthly basis. The empirical evidence presented in the paper may suggest that this particular design of retail milk price control, in conjunction with publicly announced government-set Class I fluid milk prices, actually created an institutional environment that facilitated interdependent conduct of supermarkets operating in the oligopolistic market environment. Retail prices, marketing margins and the estimated supermarket profit tend to be higher during the law period as compared to the pre-law period. Supermarkets were pricing at the NYSDAM maximum retail price threshold level, if it was profitable for them. This was the case of fluid whole milk sold in half-gallon containers in all analyzed cities and fluid whole milk sold in gallon containers in New York City.

Asymmetric response of retail milk prices in the northeast revisited

Retail milk price responses to farm price changes were analyzed for Boston, Massachusetts, and Hartford, Connecticut. Prior research concluded that asymmetries did not exist in the response of retail fluid milk prices to changes in farm prices. This study finds transmission rates are greater for the Compact period (100–120%) than the pre-Compact period (66–88%). Short-run asymmetries are apparent. Retail prices respond 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. [EconLit Classification: Q110, Q130, L110]. © 2005 Wiley Periodicals, Inc. Agribusiness 21: 493–508, 2005.

Retail oligopoly power, dairy compact, and Boston milk prices

This paper assesses the impacts of the Northeast Dairy Compact (NEDC) and retail oligopoly power on fluid milk prices in Boston. Empirical results reveal that price increases due to oligopoly power outweighed those caused by the NEDC by nearly seven times. In fact, markups are estimated at approximately 25% of the retail milk price, translating into approximately a little less than $0.75/gallon. We also estimated that only around two-thirds of the raw milk price changes were passed forward to consumers. This helps explain why consumer prices have come down only little after elimination of the NEDC. In fact, the new milk income-loss contract program, which basically provides partial price subsidies to farmers, has contributed to low raw milk prices that have generated substantial benefits to milk processors and retailers, modest benefits to farmers and consumers, all at the expense of taxpayers. [JEL classification: L66, L11, L13]. © 2005 Wiley Periodicals, Inc. Agribusiness 21: 477–491, 2005.

Impact of the Northeast Interstate Dairy Compact on Consumer Prices for Fluid Milk

The objective of this paper is to analyze the impact of the Northeast Compact on retail fluid milk prices in New England. An econometric model was estimated to simulate the farm-to-retail price spread and to analyze the impact of the Northeast Compact on retail milk prices. The results found that retail milk prices rose 30.5 cents per gallon in Boston and 31.4 cents per gallon in Hartford over the Compact period compared with the pre-Compact period. About 70% of this increase was directly attributable to the Northeast Compact.

Retail Milk Prices in Western Europe: Are the Data Relevant?

Journal Article Retail Milk Prices in Western Europe: Are the Data Relevant? Get access A. Peter Ruderman A. Peter Ruderman Garrett Park, Maryland Search for other works by this author on: Oxford Academic Google Scholar The Economic Journal, Volume 74, Issue 293, 1 March 1964, Pages 233–234, https://doi.org/10.2307/2228162 Published: 01 March 1964

The Fixing of Retail Milk Prices

The Manchester SchoolVolume 10, Issue 2 p. 134-143 The Fixing of Retail Milk Prices P. T. Bauer, P. T. Bauer Gonville and Caius College, CambridgeSearch for more papers by this author P. T. Bauer, P. T. Bauer Gonville and Caius College, CambridgeSearch for more papers by this author First published: December 1939 https://doi.org/10.1111/j.1467-9957.1939.tb00523.xRead the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Volume10, Issue2December 1939Pages 134-143 RelatedInformation