Journal on Chain and Network Science 2012; 12(1): 25-39

WageningenAcademic P u b l i s h e r s

The German milky way: trade structure of the milk industry and possible consequences of a food crisis
B. Pinior1,2, U. Platz3, U. Ahrens3, B. Petersen2, F. Conraths1 and T. Selhorst1 1Friedrich-Loefer-Institut, Federal Research Institute for Animal Health, Institute of Epidemiology, Seestr. 55, 16868 Wusterhausen, Germany; beate.pinior@fli.bund.de 2Institute for Animal Science, Preventive Health Management Group, University of Bonn, Katzenburgweg 7-9, 53115 Bonn, Germany 3Federal Office for Agriculture and Food, Deichmanns Aue 29, 53179 Bonn, Germany

Abstract
The aim of this paper is to analyze the structure of the trade network between milk producers, dairies and milk collection companies in Germany through a network analysis using suitable centrality measures. The study shows that structures exist among the relevant enterprises which are critical for the spread of a contamination in the German milk trade network. The results may be used to improve food security. Keywords: trade connections, milk supply chain, network analysis, spread of contagion, gravity model

1. Introduction
Food trade is increasingly important for supplying customers with commodities and leads to cross-border interdependencies between the actors of the global food trade (European Commission, 2008; Gampl, 2006; Hennessy et al., 1996). Wegmeth (2002), Theuvsen (2004) and Deimel et al. (2008) described the relationship between actors of the food chain as mutual dependencies. The degree of dependency is determined by: (a) the number of potential or actual transaction partners; (b) the extent of transactions, i.e. the quantities delivered between food partners; and (c) the geographical distances between producers of a commodity and the processing units. The relevance of the global food trade on the supply for the customer is illustrated by the fact that the trade of agricultural goods, including about 70% of food products, has almost doubled since 2000 (Fricke, 2010). However, the cross-linked structure of trade also hampers the traceability of food products (Gampl, 2006). Recent food scandals like the enterohemorrhagic Escherichia coli (EHEC)-crisis and the dioxin scandal in Germany in 2011 or the Chinese melamine scandal (2008) illustrated the strong connectivity of the delivery structures in the agricultural and food processing sector and showed that such crises have the potential of widening to a national or even international dimension (Fricke, 2010; Schulze-Althoff et al., 2007; Taylor, 2008).

Dairy products are prone to facilitating the spread of potential risks associated with them due to their rapid consumption and their use in combination with other kinds of food in a variety of food processing sectors (Ingelfinger, 2008; Valeeva et al ., 2005; Wein and Liu, 2005). This assertion is underpinned by the melamine scandal in China in 2008. In this case melamine was not only contained in baby food but also in leaven, toffees and soy products (Duchowski et al., 2009). In order to avoid and control the potential spread of contagions via dairy products, it is suitable to establish efficient traceability systems. The implementation of such systems would on the one hand enable a transparent organization of commodity flows and could on the other hand be used by risk managers to mitigate the risk of the spread of contagions (Butterworth, 2011; Gampl, 2006; Schulze-Althoff et al., 2005). In the case of a food crisis, the combination of the actual trade structures with the foreknowledge about recurrent trade connections or trade patterns is expected to refine the efficiency and effectiveness of the traceability of goods (Gampl, 2006; Chads et al., 2011; Natale et al., 2009). However, the application of network theory in agricultural and nutritional science is relatively new (De Rosa et al., 2008). Network analysis provides tools for policy makers to identify enterprises of increased risk that are relevant to the spread of disease or contamination for other companies, and to identify enterprises that have a higher risk of being affected by the contaminated goods of other companies (Lentz et al., 2009). Network analysis can also forecast the consequences

ISSN 1569-1829 print, ISSN 1875-0931 online, DOI 10.3920/JCNS2012.x001

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