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Analysis of demand and supply in the dairy sector of the Netherlands

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  • A.J. OSKAM
  • E. OSINGA

Abstract

This research on the demand for and supply of milk in the Netherlands combines a detailed empirical analysis with a strong emphasis on methodological aspects. The analysis forms a pilot study for part of an EC dairy sector model. The particular demand and supply functions are derived from theory. On the demand side, information from data has been combined with a priori information. The methodology involved is discussed in detail. This particular working method enables information from cross-section (or time series cross-section) data to be combined with macro data, leading to a consistent result on aggregate level. On the supply side, two concepts are used: a dynamic price reaction and a total price. The very specific lagged price reaction of dairy farmers is investigated, assuming that they attune their production to a total price, which is derived from the prices of milk, beef, calves and concentrates. Many hypotheses about the supply function have been tested empirically. The very popular Nerlove scheme should be rejected for the supply function of milk in the Netherlands. The whole study, which incorporates also margins and margin behaviour, gives a number of clear estimations and test results.

Suggested Citation

  • A.J. Oskam & E. Osinga, 1982. "Analysis of demand and supply in the dairy sector of the Netherlands," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 9(4), pages 365-413.
    • Handle: RePEc:oup:erevae:v:9:y:1982:i:4:p:365-413.
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    File URL: http://hdl.handle.net/10.1093/erae/9.4.365
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    Cited by:

    1. Hanjoon M. Jung & Abid A Burki & Mushtaq A Khan, 2012. "Supply of Dairy Products in Developing Countries," Economics Bulletin, AccessEcon, vol. 32(4), pages 3213-3223.
    2. Roemen, J.H.J., 1991. "The long term elasticity of the milk supply with respect to the milk price in the Netherlands in the period 1969-1984," Other publications TiSEM 2b9606bf-212e-4ddc-bcf0-6, Tilburg University, School of Economics and Management.
    3. Roemen, J.H.J., 1991. "The long term elasticity of the milk supply with respect to the milk price in the Netherlands in the period 1969-1984," Research Memorandum FEW 488, Tilburg University, School of Economics and Management.
    4. Jogeneel, Roel & Cronin, Evelien & Polman, Nico, 2018. "EU CAP 2014-2020 policy implementation choices: Is there a Member State typology?," 162nd Seminar, April 26-27, 2018, Budapest, Hungary 271967, European Association of Agricultural Economists.
    5. Briz, Julian & Ward, Ronald W. & de Felipe, Isabel, 1998. "Habit Formation And Demand System Estimates For Fluid Milk In Spain," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 1(4), pages 1-17.
    6. Oskam, Arie J., 1988. "Bayesian Estimation And Prediction With An Application To The Demand For Dairy Products In The Netherlands," Staff Papers 14015, University of Minnesota, Department of Applied Economics.

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