How can differences in German raw milk prices be explained? An empirical investigation of market power asymmetries

Addressing the increasing concentration of dairy processors in Germany, this paper investigates imperfect competition on the German raw milk market. Using a panel data set of dairy processors’ price and processing data and related market information for the years 2001-2012, the conjectural variation approach allows analyzing market power of dairy processors towards raw milk producers. The paper contributes to the literature by providing an empirical up to date analysis of imperfect competition across and regions in Germany. The estimation results indicate an oligopsonistic market structure in Germany.

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JEL Codes:
C10; L10; L13; L66; Q13; R10

 Record created 2017-04-01, last modified 2020-10-28

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