Agrarian Economy 2021 Т. 14 № 1-2:82-90

Dependence of dairy farming development on consumer demand for dairy products

Yatsiv I., Doctor of Economics, associate professor
Yatsiv S., Candidate of Economics, associate professor
Lviv National Agrarian University

https://doi.org/10.31734/agrarecon2021.01-02.082

ANNOTATION

The article presents the results of a study of the peculiarities of formation of consumer demand for dairy products in Ukraine. The connection between this demand and the development of dairy farming is shown. The low level of income of the population limits its purchasing power and negatively affects the capacity of the domestic market of dairy products. This in turn reduces the investment attractiveness of dairy farming. The number of cows and milk production in Ukraine has been declining for a long time.

In Ukraine, consumption of dairy products is at the low level relatively to the recommended norms that gives grounds to expect an increase in demand for these products with an increase in real incomes. To analyze the behavior of consumers of dairy products, the coefficients of elasticity of the demand for dairy products and the cost of their acquisition depending on changes in consumer income are determined. The method of these coefficients calculation is described and demonstrated. The data from household surveys conducted by the State Statistics Service of Ukraine were used for calculations. Differences in income, consumption of purchased products and cash expenditures for their purchase per capita in decile groups of households were assessed.

It is established that the coefficients of elasticity of demand for dairy products and the cost of their acquisition by income are relatively high. The coefficients of elasticity of monetary costs for the purchase of dairy products are slightly higher than the coefficients of elasticity of demand for these products, expressed in physical terms. This indicates a certain willingness of consumers to bear the additional costs of purchasing high quality products. A promising option is to meet the needs of dairy companies in quality raw materials produced on large dairy farms. The presence of consumer groups with differentiated demands creates opportunities for small businesses to find niches in the milk market.

KEY WORDS

dairy farming, dairy products, consumption of dairy products, demand, elasticity of demand

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