Price Dynamics in Slovak Dairy Supply Chain

Paper's objective and research backgroundMilk plays a crucial role in the Slovak food consumption.This article focusses on a thorough investigation of the price fluctuations within the dairy supply chain of Slovakia, with a particular emphasis on the pricing mechanisms that govern the sale of milk.Through the analysis of both producer and consumer prices, we aim to unravel the complex relationship between these crucial elements of the milk supply chain.Furthermore, it is our aim to unravel the causal relationships between producer and consumer milk prices. Data/MethodsTo support our analysis, we have gathered data on producer prices from the Agricultural and Trade Information System (ATIS), while consumer price information has been sourced from the Slovak Statistical Office.Data was gathered from January 2006 to August 2023, to have a comprehensive view over the milk supply chain.This dataset serves as the foundation upon which we build our analysis, enabling us to find long term relationship as well as cause-andeffect linkages between the milk supply chain.To unravel the causal relationships, we employ the rigorous Engle-Granger causality test.This statistical methodology offers a robust framework for examining potential cause-and-effect linkages between these consumer and producer prices.To unravel long-term relationships, we employ Johansen cointegration test. Results/Conclusions/Value addedThe results gained from our study hold significant implications for stakeholders and policymakers within the dairy industry.Our study outcomes provide understanding behind the dynamics of milk prices shaping.Our research equips industry stakeholders with valuable information to navigate market fluctuations, optimize pricing strategies, and make informed decisions.Additionally, policymakers stand to benefit from our findings, as they seek to formulate policies that foster a fair and sustainable pricing environment within the dairy sector.In conclusion, our investigation represents an effort to unravel the intricate price dynamics within Slovakia's dairy supply chain, with milk as its focal point.Through analysis and proper methodologies, we aim to provide valuable insights that contribute to a deeper understanding of the factors driving price fluctuations in the Slovak dairy market, thereby empowering stakeholders, and policymakers alike to navigate the complexities of this industry.