This project is ongoing. Descriptions, methods and results may be updated after further validation.
Research question
How do farm-gate prices transmit across Brazilian regions and which markets lead the adjustment process?
Motivation
Milk is produced in almost every Brazilian state, yet price formation is regionally uneven. Knowing which markets lead and how fast the others react informs supply, rural credit and competition policies.
Data
- Monthly farm-gate prices by state (CEPEA/ESALQ-USP), 2016–2026
- Deflation by the IPCA consumer price index (IBGE)
Methodology
- Unit-root and cointegration tests
- Vector error-correction model (VECM) and threshold version (TVECM) for asymmetries
- Granger causality
Limitations
- State-level prices aggregate heterogeneity within each state.
- Structural breaks (pandemic, cost shocks) require explicit treatment.
Implications
- Identification of leading markets for price monitoring.
- Input for credit and supply policies in the dairy chain.
Planned applied products (possible outreach, subject to registration)
- Regional milk price bulletin for producers and cooperatives