Exploring the Cost of Milk Production & Potential Economies of Scale in a Dairy Cooperative

Agricultural cooperatives have been a unique way of addressing the concerns of the producers and consumers regarding pricing, storage, marketing, and other such activities of bringing the commodity to the market. One of such sectors is the dairy, where there are cooperatives in both the developed and developing countries. Amul Dairy, a milk cooperative in India is, synonymous with quality of its milk and milk products as well as fair prices to both the consumer and producer. In this study, we will examine the effectiveness of Amul by comparing the procurement prices offered by the dairy cooperative to the cost of producing milk. In addition, we will measure whether there are economies of scale in milk production.