During the last two decades, the Mexican dairy sector experienced important structural changes, especially after the implementation of the NAFTA agreement. In 2016, the Bank of Mexico observed that in milk market, the final prices tend to rise when input prices increase, however, they do not decrease when imput prices decrease. In this context, this study examines the degree of spatial and vertical price transmission between farm milk prices and international milk prices as well as between farm milk prices and retail milk prices, in order to assess the ef?ciency level of the Mexican and International dairy market. The ?ndings of this research provide contributions to decision makers and industry stake-holders: a unidirectional transmission of international milk prices to domestic milk prices and from farm price to retail price along with the existence of asymmetric price transmission which depends on whether milk prices are increasing or decreasing. Acknowledgement : Colegio de Posgraduados-Campus Puebla and LGAC in Economics of Rural Development