Papers by Andrew Novakovic
A.E. Ext. 85-03The objectives of this paper are: first, to review the current economic situation ... more A.E. Ext. 85-03The objectives of this paper are: first, to review the current economic situation of the dairy industry and the dominant dairy policies and issues of 1984 and second, to assess the economic and political outlook for the dairy industry in 1985. The paper begins with a discussion of the economic status of dairy markets in the U.S. at the end of 1984, followed by a review of the major policy issues of 1984. The paper concludes with some comments on the 1985 economic outlook for the U.S. dairy industry and on the possible policy changes that could shape the dairy economy beyond 1985
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E.B. 95-11On September 7 and 8, 1994, the Extension Education Committee of the Cornell Program on... more E.B. 95-11On September 7 and 8, 1994, the Extension Education Committee of the Cornell Program on Dairy Markets and Policy sponsored a workshop for dairy economists and policy analysts in Minneapolis, Minnesota. This proceedings summarizes the workshop papers and discussions
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The Uruguay Round Agreements Act (1995) directed the USDA to study the potential implications of ... more The Uruguay Round Agreements Act (1995) directed the USDA to study the potential implications of the new General Agreement on Tariffs and Trade for Federal Milk Marketing Orders. This research was conducted to comply with that requirement. The analysis described in this publication incorporates revisions to the model used in the original analysis, reflecting extensions and updates developed in conjunction with another study (ct. Pratt et al., "A Description of the Methods and Data Employed in the U.S. Dairy Sector Simulator, Version 97.3," R.B. 97-09, Department of Agricultural, Resource, and Managerial Economics, Cornell University, 1997). Of primary relevance here are changes in transportation costs which result in broader implications for North American trade in milk and dairy products.
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SSRN Electronic Journal, 2011
ABSTRACT The paper analyses the effect of the NYS Milk Price Gouging Law 200% rule (June 1991-Oct... more ABSTRACT The paper analyses the effect of the NYS Milk Price Gouging Law 200% rule (June 1991-October 2008) on the behavior of retail prices and marketing margins of fluid whole milk products sold in the largest New York State cities (New York City, Albany, Syracuse, Buffalo and Rochester). This rule established that retail prices of fluid milk products were not to exceed 200% of Class I fluid milk prices that milk processors paid for raw milk to dairy farmers. The law was enforced by the NYS Department of Agriculture and Markets (NYSDAM) by announcing the maximum retail price thresholds on a monthly basis. The empirical evidence presented in the paper may suggest that this particular design of retail milk price control, in conjunction with publicly announced government-set Class I fluid milk prices, actually created an institutional environment that facilitated interdependent conduct of supermarkets operating in the oligopolistic market environment. Retail prices, marketing margins and the estimated supermarket profit tend to be higher during the law period as compared to the pre-law period. Supermarkets were pricing at the NYSDAM maximum retail price threshold level, if it was profitable for them. This was the case of fluid whole milk sold in half-gallon containers in all analyzed cities and fluid whole milk sold in gallon containers in New York City.
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A combination of a more punitive policy situation and the greater range in size and financial per... more A combination of a more punitive policy situation and the greater range in size and financial performance in farms, especially across regions, has led to policy-makers focusing more on how new policies or policy proposals affect regions or types of farms, not just the national aggregates or average. While some new research is focusing on the implications of policy changes on farms in different areas and of different sizes, less has been done to improve how one goes about identifying and defining a "representative" farm. The basic objective of this study is to explore the relationship between structural, technical efficiency, and financial performance data for a large sample of New York dairy farms. To what extent are financial or technical performance related to farm size or some other structural characteristic? If we conclude that most highly profitable farms are large, for example, can we also infer that most large farms are highly profitable? Ultimately, we want to be a...
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Natural disasters in the u.S. demonstrate the lack of and need for integrated disaster plans for ... more Natural disasters in the u.S. demonstrate the lack of and need for integrated disaster plans for the u.S. dairy industry. It is demonstrated how a spatial model of the Northeast dairy industry can be used to assess and analyze potential impacts of local and regional disasters on market levels in the industry. A hypothetical radioactive release from a nuclear power plant reactor in the Northeast provides an example.
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A transshipment model of the Northeast dairy sector is developed to assess the potential for stru... more A transshipment model of the Northeast dairy sector is developed to assess the potential for structural change in the manufacturing industry. It is detennined that the reduction of existing hard product processing capacity near metropolitan areas would diminish total costs. Industry-wide savings of about 60 million dollars annually would be realized by fluid, soft product, cheese and butter/powder manufacturers. The model points to finn level as well as industry level incentives to move toward a more concentrated dairy manufacturing sector in the Northeast.
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Mathematical programming models, as typically formulated for international trade applications, ma... more Mathematical programming models, as typically formulated for international trade applications, may contain certain implied restrictions limiting price responsiveness, intermediate product flows, and arbitrage possibilities. These restrictions are especially important in the case of dairy, and may lead to results which are technically infeasible, or if feasible, not consistent with market equilibrating behavior. The difficulties encountered when modeling dairy trade are described, and an alternative formulation of a spatial model is presented. This formulation allows joint-inputs, multi-products, intermediate markets, and pure transshipment and product substitution forms of arbitrage.
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Price relationships across market levels have hecome an issue of concern in dairy markets as lowe... more Price relationships across market levels have hecome an issue of concern in dairy markets as lower support levels have led to increased price volatility. This study analyzes price causality in the presence of price regulation. Specific causal relationships are estimated and are not generally affected hy regulated prices.
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Papers by Andrew Novakovic