Abstract
Purpose. The purpose of the study, which results are submitted in the article, is to analyze the
vertical price transmission along the milk supply chain in Ukraine and identify whether this price
transmission is symmetric or asymmetric in terms of direction, magnitude, speed.
Methodology / approach. To achieve the purpose of the study, we used the following research
methods: logical operations (analysis, synthesis, induction, deduction) – to determine the structure
of the milk supply chain, to make conclusions about main findings; the correlation analysis – to
identify the tightness of links between farm’, processors’ and retailers’ prices, the trend modelling –
to build the functions of the trend of prices of different levels of the milk supply chain, the regression
modelling – to construct the regression functions of prices of downstream sectors of the milk supply
chain, graphic – for visual presentation of main tendencies, pricing and price dynamics in the milk
supply chain. The research was performed on the basis of the statistical data of the State Statistics
Service of Ukraine for 2013–2020.
Results. This paper presents the empirical evidence of asymmetric price transmission along the
milk supply chain in Ukraine. The results of modelling proved asymmetric magnitudes of price growth
at the organizational and technological stages of the milk supply chain: in the case of the farm prices
of raw milk increase the processors’ and retailers’ prices grow up by a much bigger magnitude.
There is no leg in price transmission in the milk supply chain, the price shocks at the farm level
instantly pass to processors’ and retailers’ prices. The evidence of asymmetry of price transmission
testifies the weaknesses of the market positions of farmers and consumers in the milk supply chain in
Ukraine, points out the threats for the food security and sustainable development of all agents of this
chain.
Originality / scientific novelty. For the first time, the quantitative assessments of the magnitude
and speed of the price changes in the process of price transmission in the milk supply chain in Ukraine
were obtained. The asymmetry of the magnitudes of the vertical price transmission in the milk supply
chain in Ukraine was identified. The hostage position of farmers in the case of price shocks was
further proved.
Practical value / implications. This paper provides a better understanding of arrangements of
market forces in the milk supply chain, the consequences of price chocks in the upstream sector of
the milk supply chain. The practical value is the methodological and empirical support for the
development of regulative measures to improve the milk supply chain’s functioning and sustain food
security. Assessment and analysis of the mechanism of price transmission reveals the weak parts of
the food supply chain, contributing to the scientific foundation of elaborating the necessary policy
actions for harmonization of relations between producers of different stages of the milk chain.