With the 2009 milk prices still fresh on everyone’s mind, there has been increased interest in ways to limit milk price volatility. Using SERF, this paper determined some dairies are willing to pay for limited milk price volatility and found a value they are willing to pay using risk premiums.

Farmers and consumers suspect that processing firms abuse their power in the milk marketing chain. We employ threshold autoregressive and moment threshold autoregressive tests and contrary to expectations find evidence of a downward trend in UHT milk real price without a corresponding decline in...