Milk Supply and Demand of Ulaanbaatar City

In Mongolia, Ulaanbaatar city (UB) is not only the largest and capital city with continuously growing populations due to its own development. Current domestic liquid milk production has not met with the consumption of UB and other big cities in Mongolia. The objective of this study is to analyze market equilibrium of liquid milk market of UB city, and determine level of milk supply. Market theory, including demand and supply analyses were applied using regression analyses to estimate functional forms and other required statistical – econometrical indicators. Secondary data gathered from National Statistical Office /2004-2014/ and methodology for converting adult equivalence methodology cited from methodological guidance. The main finding is that there is comparatively big deficit of liquid milk in UB, which leads to liquid milk insecurity (794.4 t <237.8 t). The functions and elasticity(s) show clearly that the share of dried milk higher in the market. Therefore, support of domestic liquid milk producers should desirable to increase domestic liquid milk supply. More advanced development of intensified dairy farms and supports of their activities are essential in order to meet the demands. Furthermore, we have created the map of liquid milk supply in UB.