ANALYSIS OF MARKET FACTORS INFLUENCE ON DAIRY PRODUCTION IN THE KARELIA REPUBLIC

Abstract

Prevailing trends on regional food market and economic performance data of enterprise entities show up the need to determine the most pressing factors of further development of the dairy farming field in the Republic of Karelia. Due to reduction of regional dairy market capacity and rising competition, it is necessary to search for new solutions geared to improvement of efficiency of business activities. Assessment of the impact of market factors on the production level of dairy products in the region was carried out using multiple regression analysis. A correlation analysis was used to determine strength of relationship between indicators that hypothetically influence the development of the regional dairy product market. The milk production volume in the region has been found to have a direct linkage to consumption (r=0,82) and income level (r=-0,88), consumer price (r=-0,84), expenses for food (r=-0,86) as well as retail sales volume (r=-0,85). The quantity of imported dairy products reliably tied to consumption level (r=0,88). One of possible options for solution to the problem of milk production reduction in the region is a new approach in the implementation of state support to the economic sector – shifting the focus of financing from production to distribution promoting the growth of consumer demand for dairy products.