Asymmetric price behaviour in Turkish milk and beef markets

This study aims to determine whether asymmetry in price transmission between producer (farm-gate) and retail prices exists or not in the supply chains of Turkish milk and beef markets. The main assumption of the model is that the largest cost component of the final consumer goods is the amount that the processor pays to the farmer. The series consisting of producer and retail price data are put through the Engle Granger two-step cointegration analysis and it is found that there is a long run relationship between the given prices. The resullt of Granger and Lee error correction model determining the short run relationship between the prices, indicates that there is asymmetry in the price transmission of the milk supply chain.The result of the analysis for the beef market, however the positive price changes are insignificant, indicate the existence of an asymmetry in the short run. The asymmetry between the producer (farm-gate) and retail prices denotes that the increases in the producer (farm-gate) prices are passed on to retail prices more and/or quicker than the decreases in the producer prices.