Portugal has particular conditions to produce milk and dairy products (butter and cheese, for example) in some regions (Azores, for example). This means that the dairy sector assumes special relevance for Portuguese agricultural and food production. In any case, there is a tendency for unbalances between the demand and the supply in these European Union markets, which led the European institutions to create milk quotas among 1984 and 2015. This research aims to analyse the prices of milk production (at the farm level) and dairy products (at the factory level) over the period 2017-2022 in the Portuguese mainland and Azores region. Data from the SIMA (Sistema de Informação de Mercados Agrícolas) database were considered. The consequences on the producer prices of these sectors were greater on the dairy products prices than on the milk prices and namely from the Russia-Ukraine crisis.
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The dairy context and prices always promoted interest and curiosity for diverse stakeholders, including researchers (Foltz, 2004). This is due to the volatility of the prices (Gilbert et al., 2016), particularly in some periods (Rezitis & Tremma, 2022), and the need for adjusted statistical approaches to assess the respective data (Arias & Cox, 2001). The risk of volatility transmission in the dairy markets is another topic (Rude & An, 2013) and motive of concern (Stewart & Blayney, 2011).
On the other hand, often dairy prices are vulnerable to the supply of these products (Barrett, 2009a) and this promotes regularly decreases in dairy prices (Badruddoza et al., 2022) in some cases. In other circumstances encourage increases (Barrett, 2009b) in response to the milk output (Barrett & Murray, 2013). Dairy prices are generally higher in lower-income countries, which influences the decisions of consumers (Bai et al., 2021). There may, however, in some contexts, be good prospects for the future (Philippidis et al., 2021). Dairy prices have, indeed, effects on their consumption (Sturm & Datar, 2011).
Management in the dairy sector is not easy, considering the tendencies of the evolution of the dairy prices, the contexts in the prices of the inputs (Bjornlund & Rossini, 2007), including oil price (Zmami & Ben-Salha, 2019), the retailers’ power (Kharin, 2015), the buyers’ influence (Ordofa et al., 2021), animal diseases (Swinkels et al., 2005) and Global Dairy Trade (GDT) auctions (Olipra, 2020). The vulnerability to the international markets (Howden et al., 2016), respective dynamics (McCarthy, 2015) and predictions (Murray, 2014), also affect the dairy sector planning. Some of these dynamics are not new (Morell & Söderhäll, 2019). These challenges have created innovations in the sector to deal with the difficulties (Cadilhon et al., 2016).
Public policies also have their contribution to these frameworks (Castellari et al., 2018), particularly to support the prices (Chavas & Kim, 2005), sometimes needing adjustments (Charlebois et al., 2007) and assessment (Karelakis, 2019). The agricultural policies in the European Union also were considered to support dairy exports (Muhammad & Kilmer, 2008). It was expected that technological advances contributed to promote dairy product consumption (Dong, 2006).
The discussion about the dairy markets is in the order of the day, because the climate change (Gibson et al., 2022). The Covid-19 pandemic brought additional impacts on these markets (Liu & Rabinowitz, 2021).
From the scenario described before, in the research here presented, it is intended to assess the Portuguese producer dairy prices, using information from the Portuguese agricultural markets information (SIMA, 2023) database for the period 2017-2022. To better explore the information in these data, the Stata (StataCorp, 2017a, 2017b; Stata, 2023) software procedures were followed. For the literature survey, the Scopus (2023) database was consulted. Normalised values=(xi-xminimum)/(xmaximum-xminimum).