Asymmetrical Relationship Between Raw Milk and Retail Milk in Turkey

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Ayyildiz M., ÇİÇEK A., Kaplan K.

KSU TARIM VE DOGA DERGISI-KSU JOURNAL OF AGRICULTURE AND NATURE, vol.24, no.3, pp.594-602, 2021 (ESCI) identifier identifier


Competitive conditions in the supply chain are influential on the formation of producer and consumer milk prices. Determining the asymmetrical relationship between the mentioned prices is very important in terms the disruptions in the sector and the presence of market power. In this study, it is aimed to reveal the asymmetric relationship by using raw milk and retail milk prices for the period 2005 January - December 2019.. Asymmetric error correction model (AECM) developed by Von Cramon-Taubadel and Loy was used to determine the asymmetric price relationship. As a result of the research, it was determined that retail milk prices react more rapidly to decreases in raw milk prices in the long run. This result can be considered as an important sign that the dairy industry has gained a more competitive structure. On the other hand, while improvements in price formation and price stability are observed, the quality standard and the existence of unfair competition conditions cannot be ignored. In this context, policies that encourage quality production in the dairy industry under conditions suitable for food codex should be developed and the supervision system should be strengthened.