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Revista de Economia e Sociologia Rural

Print version ISSN 0103-2003


SIQUEIRA, Kennya Beatriz; KILMER, Richard Lee  and  CAMPOS, Antônio Carvalho. The dynamics of farm milk price formation in Brazil. Rev. Econ. Sociol. Rural [online]. 2010, vol.48, n.1, pp.41-61. ISSN 0103-2003.

Dairy is a highly relevant segment of the Brazilian agribusiness economy. However, this segment has changed significantly after deregulation Thus, it is worthwhile to know what the changes are in the spatial integration of the market and in milk price formation at the farm level after deregulation. The methodology is a modification of Gonzalez-Rivera & Helfand (2001), which is compounded in extension of the market, pattern of integration, and degree of integration. The extension of the market is determined through the measure of self-sufficiency index, unit root test, and Johansen test. The last one is focused on the searching for a common trend between the time series. The pattern of interdependence is studied using the Directed Acyclic Graph (DAG). Lastly, the degree of integration is measured by the impulse response functions derived from the Bernanke decomposition. As a result, we found that the milk market in Brazil is composed by Goiás, Mato Grosso, Mato Grosso do Sul, Minas Gerais, Paraná, Rio de Janeiro, Rio Grande do Sul, Santa Catarina, and São Paulo. We also discovered that these markets have small speed of adjustment to shocks and there is no leader in milk price formation.

Keywords : market integration; milk market; price formation.

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