Economic Factors in the Development of Kazakhstan’s Dairy Sector: An Econometric Analysis

The dairy sector plays an important role in ensuring Kazakhstan’s food security, but its development is characterized by structural imbalances, limited technological modernization, and high dependence on production and investment factors. The aim of the study is to evaluate the relationship of investment, price and production factors with the dynamics of milk production in Kazakhstan in 2004-2024, taking into account lag effects and the structural gap in official statistics starting in 2022. The information base was compiled by the annual data of the Food and Agriculture Organization of the United Nations and the Bureau of National Statistics of the Republic of Kazakhstan for 2004-2024. Descriptive statistics, Pearson correlation analysis, ADF and KPSS tests, multiple least squares regression, multicollinearity diagnostics, and alternative specification analysis are applied. The results showed that the preferred model explains 95.3% of the variation in milk production. The most significant positive relationship was found for real investments in agriculture (β = 0.461; p = 0.002) and average dairy productivity of cows (β = 0.305; p = 0.018). The producer price index did not demonstrate a statistically significant relationship with the volume of production (β = 0.021; p = 0.836). Taking into account the revision of official statistics for 2022-2024 has significantly increased the explanatory power of the model. The results show that the main factors in the development of Kazakhstan’s dairy sector are investment and increased productivity, while price signals without technological modernization do not ensure a steady increase in production.

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