Abstract:

Purpose: This study aims to investigate the impact of cattle milk prices on beef production from 1970 through 2018 for Turkey. Design/Methodology/Approach: The structural properties of the series and prior tests refer to that cointegration analysis should be conducted to establish the impact of cattle milk prices on beef production. In this context, the bounds testing approach is employed to analyze the long-run relationship between variables. Following the long-run cointegration relationship between variables is confirmed, the econometric model of the study is estimated by using the autoregressive distributed lag (ARDL) approach. Findings: The findings of the bounds testing approach indicate that the existence of the cointegration relationship between cattle milk prices and beef production in the long run. According to the estimation results of the ARDL model, beef production decreases owing to higher milk prices. The negative effect of cattle milk prices on beef production may be explained that as milk prices increase, the number of dairy cows dispatching to slaughter decreases, and hereby beef production cuts down. On the other hand, cutting down milk prices leads to an increase in dispatching of dairy cows to be slaughtered, which results in harming the production of male calves (the main fattening material) and the dairy market. Therefore, policy measures to prevent the fluctuations in milk prices will able to support beef production as well.

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