Variations and correlations in the Brazilian dairy market

Abstract

The objective of this study was to analyze the variations of milk and dairy product prices and the correlations between them. Variation and correlation coefficient values were used, as well as their extensions, here denoted as the “moving variation coefficient” and “the moving correlation coefficient”. Besides, a time series analysis technique was applied, such as the seasonal and trend decompositions. The data used are from the period from january 2005 to december 2020. The prices related to the dairy market show little volatility and, in comparison with other agricultural commodities, they are among those that have oscillated less. The farm-gate milk price is more closely linked to the prices of mozzarella cheese and to spot milk prices, which refers to milk traded between companies. The relationship between farm-gate milk price and the UHT milk and milk powder was moderate and weak, respectively. Moreover, the low correlation between prices of farm-gate milk and UHT milk was not expected. The results found can help with the public policy elaboration, and with the understanding and the forecast of price trends for farm-gate milk, besides allowing of the management improvement for both dairy producers and dairy companies.