Dairy product storability and market integration

Recognizing dairy products’ different storage potential, this study examines price integration across regions in Poland using weekly prices over the period 2008-2022. Testing detected and corrected the non-stationarity in price series of milk, butter, gouda-type cheese, and powdered skim milk prior to further analysis. Examination of the price integration of all products nationally and in two leading dairy regions linked the interrelatedness of prices to the perishability/storability of each product. Results show that prices of dairy products that can be stored for prolonged periods (butter, gouda-type cheese, and powdered skim milk) are integrated, while prices of perishable products with a short shelf life (milk, curd, and yogurt) are not integrated. Spatially, all dairy product prices are integrated between the two regions, eliminating opportunities for sustained pecuniary gains from regional price differences. The differences in the price interaction for dairy products with varying storability and between the regions allow the consideration of allocating raw milk to manufacturing specific products as well as applying different marketing and merchandising strategies to various products sold in different regional markets.