INTERNATIONAL MARKETS’ INFLUENCE ON COWS` MILK IN THE REPUBLIC OF NORTH MACEDONIA

In the last decade, the competitiveness of livestock production in North Macedonia has been constantly decreasing, primarily due to declining of production and productivity. Livestock contributes around 30% to agriculture gross value added, with cattle and cows milk as the primary sources. In 2023, raw cows` milk production reached around 2.4 million litres. According to the Common Market Organization, there are about 12,000 specialized dairy producers, with rather small herds (less than 10 cows). This study examines the competitiveness of the dairy sub-sector and international markets influence on Macedonian cows` milk prices. It analyses a series of 204 monthly cows milk price data from January 2005 to December 2021, comparing Macedonian prices with those in the EU and non-EU markets, using statistical econometric methods. In general, Macedonia has lower purchase milk prices (EUR 28.95), compared to EU (EUR 32.77) per 100 kg, but still following the EU price trends. The correlation between Macedonian and EU prices is moderate (0.52). The Macedonian prices react slowly to international market changes with 3-month delay, according to the lag tests (BIC, HQIC, AIC, FPE). The Granger causality test highlights the impact of international.