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International milk market is created by 7% of world productionvolume. Volatile world milk prices in recent 6 years caused different forms of itstransmission to national levels. In the paper this phenomena is investigated ontwo levels. First, on macro level how world milk price affects national marketsin case of New Zealand as leading world exporter, Germany with growing netexport, and Serbia with self-sufficient production. Second, it is analysed verticalprice transmission in Serbian milk supply chain, according its magnitude, speed,nature and direction in period January 2007 to May 2013. Results improvedunderstanding how world milk price influence milk price in Serbia and howprice shocks are transmitted through milk supply chain for several mostimportant kinds of milk products.Applied vector error correction model inhorizontal milk price transmission indicates asymmetry in price transmissionfrom world to Serbian milk market. Milk prices in Serbia respond to pricesignals from German and world market, but with significant time lags andincreasing magnitude over time. From first to fourth month delay, milk pricesfrom German market positively influence Serbian market, and from fifth to tenthmonth further increasing influence of world milk prices are presented. Nature of spatial asymmetry is positive. Results of threshold vector error correction modelapplied on dairy supply chain, suggests similar conclusionsfor all four majordairy products on Serbian market. Retail prices react mostly on raw milk pricechanges, with constant response to processor’s prices. Price shocks are originateat the processor level and are passed to farmers and to retailers. Blurredrelationship between processing and retail sector permits more accurate analysis.

Keywords: milk ; price ; transmission ; World ; Serbia

Subject(s): Agribusiness

Demand and Price Analysis

International Relations/Trade

Issue Date: 2013-08

Publication Type: Conference Paper/ Presentation

PURL Identifier: http://purl.umn.edu/160393

Total Pages: 14

Record appears in: European Association of Agricultural Economists (EAAE) > 135th Seminar, August 28-30, 2013, Belgrade, Serbia

Autor: Popović, Rade ; Radovanov, Boris ; Jeremić, Marija

Fuente: http://ageconsearch.umn.edu/record/160393?ln=en

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