Over the past thirty-five years, the distribution of raw milk has been expanding. This paper analyzes the joint sales of the Designated Associations (cooperatives of raw-milk producers) with respect to the supply control of raw milk, based on a case study of Iwate Prefecture. Recently the Designated Associations are not only expected to control the supply of raw milk, but also assure the balance of supply and demand in the raw milk market. The results of this study are as follows: 1) Japanese dairy farmers are currently facing new business difficulties, such as demand and supply imbalances as well as depressed prices of raw milk. The Designated Association of Iwate Prefecture has launched two campaigns to prevent market surpluses and consequent market and price instability: first, supplying raw milk to local dairy plants, and second, supplying surplus raw milk to many areas, with Zennoh, a nation-wide cooperative, undertaking this role. 2) The Designated Association of Iwate Prefecture supplied raw milk to Tokyo and farther west areas, with the supply volume accounting for over 40% of total product volume in 2001. Stabilization of prices at a low level, basically prescribed by the cost of a long-distance transport, is however, observed in Iwate Prefecture. 3) The Iwate Prefecture-based Kitafukuoka dairy plant is operated by Zenrakuren (the other nationwide cooperative). In cooperation with the Designated Associations, this dairy plant prevents demand and supply imbalances, contributing to the stabilization of raw milk prices. However, management of dairy plants with top priority to the stability of raw milk market is very difficult.
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