Abstract for: The Impact of Production Technology on Dynamic Behavior of Brazilian Farm Milk Prices
The Brazilian farm milk production sector is composed of a myriad of production systems and technological combinations. Low productivity per cow productivity predominates, particularly for small-scale producers. However, there are few studies that explore the effects of this condition on the price oscillations in the long-term. We develop a Systems Dynamics simulation model to test the hypothesis that the improvement of technology in herd management can reduces the oscillations in the price paid to dairy farmers. The main result is that exogenous shocks in the production costs, and the income of the population result in different farm milk price oscillation frequencies, amplitudes, and persistence when the set of parameters that define the technology of Brazilian dairy farms are changed.