Profitability and Market Structure of Fresh Milk Marketing in Borno State, Nigeria
Understanding the profitability and market structure of fresh milk marketing is critical for formulating effective interventions to improve livelihoods and market efficiency in northern Nigeria. This study estimated the profitability of fresh milk marketing and determined the market structure for fresh milk marketers in Borno State, Nigeria. Primary data were collected from 302 purposively sampled fresh milk marketers across Biu, Maiduguri Municipal Council (MMC), and Monguno Local Government Areas using structured questionnaires. Gross margin analysis was used to assess profitability, while the Gini coefficient, Lorenz curve, price determination mechanisms, supply chain analysis, and cooperative membership data were used to characterize market structure. The gross margin of fresh milk marketing was ₦1,039.06 per unit period, derived from total revenue of ₦2,806 and total variable cost of ₦1,766.94, yielding a market efficiency ratio of 37%. Transportation (27.6% of total variable cost) was the dominant cost item. Income distribution analysis yielded an estimated Gini coefficient in the range of 0.45–0.60, indicative of an oligopolistic market structure. Haggling and negotiation dominated price determination (75.50% of marketers), and only 32.78% of marketers belonged to milk marketing cooperatives. These findings point to a profitable but structurally imperfect market, with significant income inequality and limited marketer bargaining power. Policy interventions should focus on reducing transport costs, strengthening cooperative institutions, and improving infrastructure to enhance market competitiveness.
Keywords: Profitability, Gross margin, Market structure, Gini coefficient, Fresh milk marketing, Borno State
