Sustainability and Scale: US Milk-Market Orders as Relocalization Policy

Equilibrium in a free market can result in prices and quantities which maximize society welfare for a given resource distribution. Departures from equilibrium of the competitive model will involve changes in net social gains and losses not only for the national economy as an aggregate, but also for particular groups or regions. The trade-offs between groups or regions, in fact, may be much larger than the aggregate changes averaged over all groups.Departures from equilibrium under restricted pricing conditions, such as exist with the federal order marketing system in the fluid milk industry, also will involve social gains and losses on national, regional, and local levels. Given the rapid decline in Grade B or manufacturing grade milk production, the concern about equity, and the evolution of new institutions in the milk market, conditions affecting equilibrium in the fluid milk industry also must change. The nature of these changes can have marked effects on the benefits received by the participants in the industry.

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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

Agribusiness ◽

10.1002/agr.21304 ◽

2012 ◽

Vol 28 (4) ◽

pp. 377-399 ◽

Cited By ~ 7

Author(s):

Yuliya V. Bolotova ◽

Andrew M. Novakovic

Keyword(s):

New York ◽

New York State ◽

Price Transmission ◽

Pricing Strategies ◽

York State ◽

Transmission Process ◽

Whole Milk ◽

Price Gouging ◽

Milk Market ◽

The Impact

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The dynamics of farm milk price formation in Brazil

Revista de Economia e Sociologia Rural ◽

10.1590/s0103-20032010000100003 ◽

2010 ◽

Vol 48 (1) ◽

pp. 41-61 ◽

Cited By ~ 2

Author(s):

Kennya Beatriz Siqueira ◽

Richard Lee Kilmer ◽

Antônio Carvalho Campos

Keyword(s):

Unit Root Test ◽

Price Formation ◽

Impulse Response Functions ◽

Spatial Integration ◽

Mato Grosso ◽

Speed Of Adjustment ◽

Common Trend ◽

Self Sufficiency ◽

Milk Market ◽

Mato Grosso Do Sul

Dairy is a highly relevant segment of the Brazilian agribusiness economy. However, this segment has changed significantly after deregulation Thus, it is worthwhile to know what the changes are in the spatial integration of the market and in milk price formation at the farm level after deregulation. The methodology is a modification of Gonzalez-Rivera & Helfand (2001), which is compounded in extension of the market, pattern of integration, and degree of integration. The extension of the market is determined through the measure of self-sufficiency index, unit root test, and Johansen test. The last one is focused on the searching for a common trend between the time series. The pattern of interdependence is studied using the Directed Acyclic Graph (DAG). Lastly, the degree of integration is measured by the impulse response functions derived from the Bernanke decomposition. As a result, we found that the milk market in Brazil is composed by Goiás, Mato Grosso, Mato Grosso do Sul, Minas Gerais, Paraná, Rio de Janeiro, Rio Grande do Sul, Santa Catarina, and São Paulo. We also discovered that these markets have small speed of adjustment to shocks and there is no leader in milk price formation.

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