From producer to consumer: relations between prices of selected products in the agri-food market

The food supply chain is characterized by a large diversity of entities comprising it, and combines actions taken at different levels, starting with the producer and ending with the consumer. The primary aim of an efficient functioning of the food supply chain is to ensure buyer satisfaction while providing profits to companies participating in product flows. Changes occurring in agricultural production, often cyclical, are echoed at each stage of the supply chain. This phenomenon is visible in changes to price levels and in dependencies between price levels at individual stages of the chain. Prices are the most dynamic element of the market; price volatility and transmission has always been the subject of theoretical considerations and empirical market analyses. Hence, the main purpose of this paper was to investigate the occurrence of milk and poultry price transmission in the supply chain. This analysis will cover the study of existing relationships between prices of selected agri-food products at individual stages of the supply chain, and will determine their direction. In addition, the analyses will be supplemented with the assessment of price growth in real and nominal terms at individual stages of the supply chain. The occurrence of transmission of price signals in the study of these relationships will be checked with the Granger causality test and VAR models which do not require the model to be compliant with the theory of economics. The period covered by these analyses is 2010–2017.