The Asymmetrical Transmission Of Prices In Dairy Market Of China

Since the "melamine" incident in 2008,China has begun to reflect on the disadvantages of the previous "dairy enterprise + milk station + dairy farmer" industrial chain model,and has gradually implemented a policy for restructuring the dairy production chain to promote the scale of dairy farmer and the concentration of dairy enterprises.The degree of improvement is encouraged,and dairy enterprises are encouraged to establish a "benefit sharing and risk sharing" connection mechanism with dairy farmers through the "order +shareholding" method,encourage dairy enterprises to enter in the breeding process,and ensure the quality and safety of raw milk.In recent years,the scale of dairy farming in China has increased rapidly,and the concentration of dairy enterprises has also increased significantly.To a large extent,dairy enterprises have played a regulatory and leading role in dairy farming,and qualitative changes in milk quality and security have been improving.The quality and safety of dairy products have obvious effects.However,behind the improvement in milk quality,Chinese cow inventory and raw milk output fluctuated.In some years,raw milk output even experienced negative growth,and a large number of dairy farmers have withdrawn from the market.In fact,the restructuring of the dairy industry chain has not formed the market power of dairy farmers and dairy enterprises.Large dairy enterprises have adopted targeted contracts,milk quality testing rights,accounts payable period,expanding international milk sources,and strengthening self-control and self-construction.Strengthening vertical control over the dairy industry chain by means of milk source construction and other means has provided the possibility to pass on risks upstream.This article sorts out the restructuring policy of China's dairy industry chain and its impact,theoretically analyzes the possibility of the buyer power of dairy enterprises,and based on the theory of asymmetric price transmission,based on domestic raw milk prices,domestic finished milk prices,and international dairy prices.It is a price observation node on the industry chain,observes the phenomenon of asymmetric price transmission,and verifies whether there is the buyer exist.It hopes to help clarify the current market organization interests of the Chinese dairy industry chain and provide a theoretical basis for the adjustment of dairy policy.Study the formation and influence of the buyer power of dairy enterprises.In addition to the introduction,conceptual definition,and theoretical basis,the research content of this article is mainly divided into three parts:The first part is the analysis of buyer power of Chinese dairy enterprises.After reviewing the "melamine" incident,the Chinese government's policy document to promote the merger,reorganization and scale-up of dairy farming in the dairy industry,believes that the core idea of the policy is "vertical integration with dairy enterprises as its core",with the aim of promoting dairy farming.While scaling up and increasing the concentration of dairy enterprises,it also promotes dairy enterprises' responsibilities and realizes they control the quality and safety of milk throughout the industry chain.The restructuring policy of the dairy industry chain has effectively improved the quality of dairy products.The concentration of dairy enterprises and large-scale dairy farming have been rapidly improved.However,the growth of dairy farming has been weak.Contracts,raw milk payable period systems,dairy enterprises' control over third-party inspection rights,and asymmetric market entry may have deepened vertical control over dairy enterprises over dairy farmers.Difficulties faced by China's dairy farming industry In addition to the high cost of breeding,the decline in the relative profit margin brought by the scale of breeding,and the impact of falling international dairy product prices,there are still a large number of dairy product imports and dairy processing links when domestic prices are low.The huge difference in profitability from the breeding sector can still reflect that the buyer power exercised by dairy enterprises is one of the important reasons.The second part is the empirical analysis of buyer power of Chinese dairy enterprises based on price transmission.This part of the theoretical analysis studies the formation of asymmetric price transmission under the buyer power.Based on monthly data of international dairy prices,domestic finished milk prices,and domestic raw milk prices from 2009 to 2018,the VAR model is used to observe the upstream and downstream prices of the industrial chain after the impact.The asymmetric transmission effect,and use the VEC model to observe the recovery rate of each price after the impact.The empirical results show that there is a long-term cointegration relationship between the three sets of price series.The impulseresponse analysis shows that there is a significant price asymmetric transmission in the dairy industry chain.International dairy prices have a significant impact on domestic raw milk prices,but have an smaller impact on domestic finished milk prices.The rise in domestic raw milk prices can be passed to the domestic finished milk market more quickly than the decline,while the decline in international dairy prices and domestic finished milk prices can be passed to the domestic raw milk market faster than the rise;the recovery of domestic raw milk's shock to the rise.The recovery speed of domestic raw milk to the impact of the rise is greater than the decline,while the recovery speed of domestic finished milk to the decline is faster than the rise.This shows that dairy enterprises have a buyer power,can pass the risks of international and domestic dairy markets to dairy farmers,and have a certain ability to maintain profit margins.The third part is the regulatory suggestions for the buyer power of Chinese dairy enterprises.Based on the above research,it is believed that there is an obvious buyers power of dairy enterprise in Chinese dairy industry chain,which has caused the interests of dairy farmers to be damaged.It also puts forward suggestions such as improving the raw milk pricing system,improving the third-party testing system,developing the domestic low-temperature milk market,encouraging the development of dairy farming cooperatives,and flexible dairy product trade policies,etc..With a view to regulating the buyers power perspective of dairy enterprise,in order to solve the problem of shrinking dairy farming and ensure fair and reasonable income for dairy farmers.