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

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

Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 2015, vol. 63, issue 3, 887-892

Abstract: 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 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:mup:actaun:actaun_2015063030887

DOI: 10.11118/actaun201563030887

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