PRICE TRANSMISSION ON THE MILK PORTUGUESE MARKET

Abstract

This paper aims to analyze the milk prices transmission along the food chain in Portugal, temporally and spatially. The analysis will be carried out with feed prices, farm gate milk prices and with the index prices of package milk out of factory. The results show that the volatility on retail prices is small but after 2008 the prices outside industry show a real increase. Beside that evolution, farm gate price does not change when the price of package milk changes. In mainland, price transmission from retail to farm price does not happen but for Azores the transmission is effective. In the intensive systems, the risk to collapse is bigger than in the extensive systems, where the volatility of prices reflects the process of markets adjustment to changes in supply and demand conditions.