Journal article

Publication year: 2016

Pages: 65-72

Journal: Agrarwirtschaft

Volume number: 65

Issue number: 1

ISSN: 0002-1121

eISSN: 0515-6866

Publisher: Verlag Alfred Strothe GMBH & Co.

Abstract: 
Whether observable raw milk prices are more likely to increase or decrease the economic situation of dairy farmers is in dispute. Using a game-theoretic model, we show that observable raw milk prices can be restrictive and profitable for dairies if the tendency towards concentration in the dairy sector persists. Whereas observable raw milk prices open a chance for dairy farmers to receive a higher producer surplus, they carry a risk for final consumers to receive a lower consumer surplus. In particular, we argue about cooperatives because they are predominant in the dairy sector. Our findings can be generalized to other organizational forms in the dairy sector because similar organizational structures are established by long-term contracts.

Harvard Citation style: Hildenbrand, A. and Kuehl, R. (2016) Observable Raw Milk Prices: Chance for Dairy Farmers - Risk for Final Consumers, Agrarwirtschaft, 65(1), pp. 65-72

APA Citation style: Hildenbrand, A., & Kuehl, R. (2016). Observable Raw Milk Prices: Chance for Dairy Farmers - Risk for Final Consumers. Agrarwirtschaft. 65(1), 65-72.