Analysis of co-integration between milk dairy and beef cattle in Mato Grosso

Abstract

Livestock in Mato Grosso can be considered a national reference, standing out among other factors due to its herd size. However, dairy farming has been losing participation in the domestic scenario. Invariably, beef and milk production have an intrinsic relationship in the state, where beef livestock cycles determine factors to explain the production and price of milk. That is observed in the presence of an intense short-term relationship between milk production and price, as expected, and the calf price and live cattle. The effect of the impulse response on milk production shows that the variable that most impacts the producer's decision concerning milk production are the price of live cattle. Shocks in the price of live cattle produce a negative response in milk production, but the effect of the calf's price in turn positively influences production. The lack of specialized genetics may be one of the main causes of this close relationship, causing changes in the state's beef market and meat production to significantly affect milk production and price.