The role of market drivers in explaining the EU milk supply after the milk quota abolition

Roel Jongeneel and Ana Rosa Gonzalez-Martinez

Economic Analysis and Policy, 2022, vol. 73, issue C, 194-209

Abstract: The abolition of the EU milk quota system since 2015 has allowed the dairy sector to fully react to market forces. This change should be properly reflected within the tools that support the design of EU/national policy interventions. This paper focuses on updating the milk supply responses at EU member state level in a context where still limited data is available. Using a Mixed Estimator a set of equations for the yield per cow and the size of the dairy herd, has been estimated, leaving the milk supply derived as an identity. An important outcome of this study is that milk supply at country level is inelastic, with the (short-run) yield and herd milk price elasticities being 0.2 and 0.1 respectively. The study concludes that two thirds of the impact of a milk price change is resulting from dairy cow yield changes, while a third is resulting from changes in the number of dairy cows.

Keywords: Milk supply; AGMEMOD; Milk quota; Mixed estimator; Market outlook (search for similar items in EconPapers)
JEL-codes: C01 C13 C51 C54 Q11 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0313592621001703
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:73:y:2022:i:c:p:194-209

DOI: 10.1016/j.eap.2021.11.020

Access Statistics for this article

Economic Analysis and Policy is currently edited by Clevo Wilson

More articles in Economic Analysis and Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().