Dairy farmers' satisfaction with the price paid by processors in competitive markets

Price is the main attribute considered in negotiations between companies in many agricultural commodity markets. However, there is evidence that unit price is only one factor affecting dairy farmers' satisfaction with dairy processors, which has implications for the coordination of supply chains. The understanding of price satisfaction as embodying multidimensional attributes that influence farmer satisfaction are important for the formulation of commercial strategies aimed at reducing market asymmetries. The objective of this study was to assess dairy farmers' satisfaction with the prices they receive across multiple dimensions and to determine its relationship with overall satisfaction with dairy processors within a competitive market context. A conceptual price satisfaction model was used, and exploratory factor analysis was applied to identify the main constructs of satisfaction levels with price. Regression models were used to identify the relationship between theoretical constructs and levels of satisfaction. The results indicate that, in order of importance, milk dairy farmers' satisfaction with the price is explained by the constructs price transparency, price:quality ratio, price credibility, price confidence, and price fairness. Furthermore, the level of satisfaction with the price and the overall satisfaction of dairy farmers with dairy processors is independent of their technological level or scale of production. The results also suggest that a significant part of the satisfaction level of rural dairy farmers goes beyond the multidimensional aspects of price satisfaction, as is the case with milk in Brazil.