As the milk in Lithuania produces by a lot of milk producers, who sell their product to several customers (several large dairy processors), a hypothesis appears, that Lithuanian raw milk sector is oligopsonic. In this case, the price is not determined by the product producer, but by the buyers. This situation is typical for many agricultural products in food supply chain. This study aims to determine the market power of the Lithuanian milk processing industry on the market of raw milk. An empirical analysis is based on the New Empirical Industrial Organization (NEIO) market power models. Empirical research has showed that there was an oligopsony (0.28) in the Lithuanian raw milk market.
JEL codes: C10, D21, D43, L10, L66.
Keyword(s): agricultural markets, food industry, market power, nonlinear programing, oligopsony, vertical market structure
Stalgienė, A.; Jedik, A. 2015. Oligopsoninė galia žemės ūkio produktų rinkoje: Lietuvos žalio pieno rinkos atvejis. Management theory and studies for rural business and infrastructure development = Vadybos mokslas ir studijos - kaimo verslų ir jų infrastruktūros plėtrai 37(1):114-121.
DOI:http://dx.doi.org/10.15544/mts.2015.11 (ISSN 1822-6760 (print) / ISSN 2345-0355 (online)) [EBSCO, Business Source Complete, Ulrich’s, DOAJ, OAJI, IndexCopernicus, ERIH PLUS andAcademicKeys.com.].
Scentific Publication: Oligopsony power in agricultural market: the case of the Lithuanian raw milk market (In Lithuanian language)