Acta Univ. Agric. Silvic. Mendelianae Brun. 2015, 63(3), 887-892 | DOI: 10.11118/actaun201563030887

The Character of Price Transmission Within Milk Commodity Chain in the Czech Republic

Barbora Dudová, Věra Bečvářová
Department of Regional and Business Economy, Faculty od Regional Development and International Studies, Mendel University in Brno, Zemědělská 1, 613 00 Brno, Czech Republic

The article is focused on price transmission within milk commodity chain in the Czech Republic. The article distinct on milk products with low value added - cow milk/paper box milk and products with higher value added - cow milk/butter. Price transmission is measured by the coefficient of elasticity of the price transmission (EPT); price transfer is examined in demand as well as supply direction. Next part of the analysis measures price differences (by coefficient determination - R2) in supply direction. Last step in this analysis is the impact of time delay at the price transmission process (measured by R2). The price transmission is asymmetric in the supply direction on both parts of commodity chain (EPT = 0.29 and 0.62), in the demand direction is more symmetric (EPT = 0.31 and 1.02). The assumption of better transfer of positive price changes was confirmed. At the commodity chain of milk/dairy products the time delay is not so much important. With both tested commodity chains there was found higher power of downstream markets, proving demand driven behaviour of these commodity chains, and there was detected oligopsony market structure as well. The data represent monthly prices on both chosen vertical levels in the period of 1/2000-8/2013.

Keywords: agribusiness, agriculture, milk, dairy product, price, transmission, commodity chain, elasticity, asymmetry
Grants and funding:

The paper has arisen within the research project of MENDELU MSM 6215648904 "Czech economy in the process of integration and globalization and the development of agrarian sector and sector of service in new conditions of European integrated market", the thematic direction 04 "The trend of agri-business, formation of the segmented markets within commodities' chain and the food nets in the process of integration and globalization and the changes of agrarian policy".

Prepublished online: June 28, 2015; Published: August 1, 2015  Show citation

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Dudová, B., & Bečvářová, V. (2015). The Character of Price Transmission Within Milk Commodity Chain in the Czech Republic. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 63(3), 887-892. doi: 10.11118/actaun201563030887
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