A time series analysis of Danish markets for pork, chicken, and beef

We offer a first-time empirical depiction of Danish dynamic meat price/quantity transmissions by formulating, estimating, and testing a VAR model of market-clearing quantities and prices of the Danish pork, chicken, and beef markets. The analysis illuminates how these markets dynamically handle shocks, and it is demonstrated that: (i) the three meats are close substitutes; (ii) chicken and pork market shocks have own-market and cross-market effects that occur rapidly and swiftly, while beef market shocks have more enduring impacts on pork and chicken markets; (iii) prices are in general more endogenous than quantities; and (iv) the price of chicken is much more endogenous than the prices of pork and beef.     

尼日利亚不同地区反刍动物市场定价行为研究

本文对尼日利亚牛羊市场的空间价格一体化程度进行了检验，试图运用双变量自回归时间序列模型验证寡头垄断市场上牛羊价格的非竞争性定价行为。论文分别对牛羊市场的合谋、歧视性、价格领袖和竞争性定价行为进行了经验性检验。结论表明，在牛羊价格形成中，博尔诺（Borno）和索科托（Sokoto）州的牛羊价格领先于克里斯河（CrossRiver）、依莫（Imo）、卡诺（Kano）、拉各斯（Lagos）、尼日尔（Niger）和奥约（Oyo）州这些地方市场的价格。有关证据也支持共谋定价一般与市场的集中有关的判断。     

Foot-and-mouth Disease and Trade Restrictions: Latin American Access to Pacific Rim Beef Markets

Owing to their eradication of foot-and-mouth disease Argentina and Uruguay have recently been granted access to the fresh beef markets of the United States and Canada. This raises the prospect of Latin American suppliers gaining access to other Pacific Rim markets, and of increasing the integration of the Pacific and non-Pacific beef markets. A two-commodity spatial equilibrium model is constructed for the base year 1995. Projections are then made for the year 2001 under various policy and other scenarios. In some instances, major changes in trade patterns may result.     

Measuring impacts and adaptations to climate change: a structural Ricardian model of African livestock management1

This article develops a new cross‐sectional methodology that explicitly incorporates adaptation into an analysis of the impacts of climate change. The methodology examines how a farmer will change choices of species and number to adapt to climate. The approach is applied to study Africa, where the impacts of climate change are expected to be the most severe. The results indicate that in warmer places, African farmers switch from beef cattle to more heat‐tolerant goats and sheep. In wetter places, farmers switch from cattle and sheep to goats and chickens. The results indicate that large commercial livestock operations specializing in beef cattle will be hard hit from climate change whereas small farmers who can easily substitute to goats and/or sheep will be more resilient.     

Inflation,capital markets and the supply of beef

This paper puts forward an explanation for the negative elasticity of supply of beef found in many LDC's. As is explained by Jarvis (1974), the elasticity of supply of beef may be negative in the short run due to the dual role of cattle as both a capital and a consumption good. But in some LDC's, and especially in Latin America, one may find a long-run negative association between slaughter and prices, that cannot be explained by assuming shocks to slaughter are causing changes in prices. It is no coincidence that Jarvis' hypothesis itself was developed to explain developments in Argentina, a country with chronic high inflation. The paper argues that this long-run relationship cannot be explained by the Jarvis hypothesis, and offers an alternative hypothesis based on the demand for cattle as a hedge against inflation. The long-run negative association between slaughter and prices has been found in high inflation countries. High inflation combined with excessive regulation of capital markets cause the well known phenomenon of desintermediation. It is argued here that cattle plays a role in the inflation hedged portfolio that is then demanded. Therefore, with imperfect capital markets the supply of beef is affected by the demand for cattle as an asset, and this demand, in turn, is affected by inflation. This paper will only attempt to prove the link between imperfect capital markets and the supply of beef. The way inflation in a repressed capital market leads to an imperfect capital market is not addressed here, for reasons of brevity. The paper will develop a model that in the context of imperfect capital markets results in a negative elasticity of supply. The model will then be tested with Uruguayan data. Uruguayan data are very adequate to test the hypothesis because they cover both a period without inflation and a period of high inflation. The results support that cattle was used as an alternative to money holdings when inflation signified a big tax on the latter. Inflation therefore affected the demand for cattle, or, conversely, the supply of beef.     

Droughts and farms’ financial performance: a farm‐level study in New Zealand

We quantify the impacts of droughts in New Zealand on the profitability of dairy, sheep and beef farms using a comprehensive administrative database of all farms in New Zealand. For dairy farms, we found that drought events have positive impacts on dairy farms’ revenue and profit in the year of the drought. This effect is most likely attributable to drought‐induced increases in the export price of milk solids, as New Zealand is the market maker in this global market and almost all domestic dairy production is exported. All of these quantified impacts, however, are not very large, suggesting that, at this point in time, droughts have a fairly moderate impact on New Zealand dairy and sheep–beef businesses.     

Nontariff measures and product differentiation: Hormone-treated beef trade from the United States and Canada to the European Union

We investigate how a combination of the sanitary and phytosanitary (SPS) measure and product differentiation affects beef trade and the consequences for the United States (US)–European Union (EU) hormone-treated beef trade dispute. We develop a partial equilibrium model to represent the global beef markets and product differentiation between non-hormone-treated beef, hormone-treated beef, and other beef. The results show that removing the SPS measure increases EU hormone-treated beef imports from the US and Canada and decrease beef consumption. In addition, EU hormone-treated beef consumption and imports can be related to a few key indicators of product differentiation. The framework we develop can estimate EU hormone-treated beef consumption and imports based on a minimum of parameters relating to product differentiation, thereby providing useful applied economic analysis of a key trade measure.     

Meeting Consumer Demands with Genetics and Market Coordination: The Case of the Leachman Cattle Company

This case considers two major management decisions facing the Leachman Cattle Company, the largest U.S. beef cattle seedstock producer. The first decision relates to continued expansion into international markets. Such expansion has tremendous potential, but also introduces a host of logistical problems and risks. The second decision concerns the development and market integration required to produce a branded beef product based on Piedmontese beef cattle.     

Problems in planning tropical tree crop projects and possible solutions

Abstract

This paper considers whether top‐grade diary beef produced in Japan and high‐quality beef imports from the USA are components of the same product market. In addressing this issue an approach is used for defining the nature and extent of a product market relying on the concept of instantaneous causality. The results, for selected cuts of beef, suggest that the markets are in fact separate.     

Domestic and trade impacts of foot‐and‐mouth disease on the Australian beef industry

Australia is the sixth largest producer of beef and the second largest exporter of beef. Average beef exports from Australia are approximately 65 per cent of the total amount of beef produced, about 1.3 million tonnes. Australia is particularly vulnerable to diseases that are not endemic to the country and could close or disrupt its export markets for beef. In this study, we construct a bioeconomic optimisation model of the Australian beef industry that captures production and consumption decisions, domestically and internationally, and the impacts on the beef industry of a potentially catastrophic disease, foot‐and‐mouth disease (FMD). This study analyses localised to large‐scale outbreaks and suggests that changes in economic surplus because of FMD range from a positive net gain of $57 million to a net loss of $1.7 billion, with impacts on producers and consumers varying depending on the location of the outbreak, control levels and the nature of any trade ban.     

Consumer Choice of Retail Food Store Formats in Qingdao,China

Abstract

This study analyzes Chinese consumer behavior across different retail food store formats and how household demographics affect shopping behavior. A multivariate probit model with four categories of retail food store formats (wet markets, small grocery stores, supermarkets, and hypermarkets) in Quindao, China is estimated. The results indicate that the new hypermarkets are substitutes for supermarkets, but they do not compete extensively with wet markets and small grocery stores. Furthur development of various catagories of food shopping store formats is linked to store-owner characteristics, potential interrelations among existing retail formats, as well as consumers' demographics and shipping habits.     

A FARM GROWTH MODEL FOR POLICY ANALYSIS IN AN EXTENSIVE PASTORAL PRODUCTION SYSTEM

The development of a simulation model of an extensive pastoral farming system to assist analysts in their assessment of government policy measures is described. The model was designed to simulate, over a number of years, the physical and financial operation of a sheep and beef production system typically found in the North Island hill country of New Zealand. By manipulating model parameters and data related to prices, costs, taxation and credit, a range of policies can be represented and their effects simulated. The model is used to undertake an ex post analysis of the farm-level impact of the supplementary minimum price scheme in New Zealand and to project farm performance following the abolition of the scheme. Consideration is given to the use of the model to represent sheep and beef production systems elsewhere.     

Role of credence and health information in determining US consumers' willingness-to-pay for grass-finished beef

Consumer demand for forage- or grass-finished beef is rapidly emerging in the US. This research uses data elicited from consumer surveys and experimental auctions to provide insight on product attributes (taste/flavour, credence and nutritional characteristics) and socio-demographic factors that are most important in determining US consumers' preferences and willingness to pay premiums for grass-finished versus grain-finished beef. Information related to beef production processes increased the probability consumers would be willing to pay a premium for grass-fed beef. However, it appears that health-related messages are more important drivers of willingness-to-pay, on average, than the absence of antibiotics and supplemental hormones and traceability. Labelling information regarding grass-fed beef's nutritional content and related production processes is vital for maintaining and growing premium niche markets for grass-fed beef in the US. The relative size of the willingness to pay estimates compared to previous cost estimates suggest that the Australian beef industry may have a comparative advantage for finishing beef on forage and marketing premium grass-fed differentiated beef products in the US market.     

NEW ZEALAND BEEF AND SHEEP SUPPLY RELATIONSHIPS

The primary purposes of this study are to measure major relationships describing the responses of different components of sheep and beef farming capital stock in New Zealand to changes in economic conditions, and to investigate the way in which this capital stock has changed over time. These objectives are pursued by attempting to specify an econometric model that recognises joint production between sheep and beef cattle and also takes account of joint firm/household decision making. Aggregate New Zealand data for the period 1952/53 to 1973/74 are fitted to the model using Full Information Maximum Likelihood estimation.     

SUPPLY RESPONSE IN THE AUSTRALIAN SHEEP INDUSTRY: A CASE FOR DISAGGREGATION AND DYNAMICS*

Microeconomic capital goods theory was utilised to provide a theoretical framework on which a dynamic econometric model was based. Econometric procedures were then employed in an analysis of sheep producers' decision making regarding the annual supplies of wool, lamb and mutton, and annual changes in the inventory levels of sheep, lambs and ewes maintained for breeding purposes. Estimates show that wool prices provide the long-run stimulus for increases and decreases in the sheep flock while mutton and lamb prices are responsible for short-run changes in flock composition. Substitution between sheep and beef cattle is of considerable importance although no significant substitution between sheep and cropping could be found. Seasonal conditions proved to be an important short-run supply shifter, affecting both numbers and composition of the sheep flock.     

Generic Advertising of U.S. Lamb

ABSTRACT

Generic advertising of U.S. lamb by the U.S. sheep and lamb industry is an effort to reverse an almost continual decline in the industry since World War II. This analysis explores the answers to three related questions: (1) What have been the effects of the generic lamb advertising on U.S. and foreign sheep, lamb, and wool markets? (2) Has the generic lamb advertising program effectively increased the consumption of domestically produced lamb as intended rather than imported lamb? (3) What have been the returns to U.S. sheep producers, feeders, and packers who pay for the advertising? Using a 70-equation, non-spatial, price equilibrium, simultaneous econometric simulation model of the world sheep, lamb, and wool markets, the analysis concludes that the U.S. lamb industry’s generic lamb advertising program has positively impacted their markets, enhanced profitability of the industry, and increased the industry’s share of domestic lamb consumption.     

Influence of Trade Policies on Price Integration in the World Beef Market

The article develops three hypotheses about how policy interventions in major trading nations influence price integration in the world beef market. Simple correlation coefficients, tests for significant differences between coefficients, and Granger causality tests are used to test the hypotheses. First, segmentation between prices in Foot and Mouth Disease (FMD)-free and FMD-endemic countries is found, but it is much less than previously assumed. Second, European Community policies that closed the E.C. import market have isolated prices in the E.C. from other markets. These policies also led to greater integration among prices in FMD-free and FMD-endemic market segments by forcing exporters from both segments to compete directly in new import markets. Third, the U.S.A. is found to be the price leader in world beef markets, due not only to market size, but also to U.S. policies that allow transmission of price information from the U.S. market to the world market but not vice versa.     

ECONOMIC THEORY AND SHEEP-CATTLE COMBINATIONS*

This paper deals with the problem of determining the optimum combination of sheep and beef cattle on grazing properties. A major difficulty is that iso-cost functions (production possibility curves) for sheep and cattle are unstable and difficult to estimate because of sheep-cattle-pasture interaction. After discussion of theoretical difficulties consideration is given to practical approaches, based on the iso-cost function concept, which might provide graziers with useful guide-lines. Evidence is presented which suggests that the substitution rate between sheep and cattle with respect to pasture is not constant, and probably varies with stocking rate.     

QUARTERLY ESTIMATES OF THE DEMAND AND PRICE STRUCTURE FOR MEAT IN NEW SOUTH WALES

Multiple regression estimates of demand and price relationships for fresh beef, lamb and mutton in the N.S.W. livestock auction, wholesale, and retail markets during the period from January 1951 to June 1963 are presented. The results show that direct price elasticities of demand were negative, and of greatest absolute value in the retail market. Mutton is shown to have been a close substitute for beef and lamb, but the latter were not close substitutes with respect to price.     

Price volatility and rational expectations in a sectoral framework commodity model: a multivariate GARCH approach

This article explores supply response models in a rational expectations framework with endogenous risk by using a multivariate generalized autoregressive conditional heteroskedasticity model with Cholesky decomposition. This approach allows the incorporation of price volatility as a risk factor into the supply response of a primary commodity sector that is composed of several markets of homogenous products. The model is applied to the Greek meat sector, which is composed of four major meat categories, that is, beef, lamb, pork, and broiler, and thus the model for the entire market includes supply and demand equations for all the four meat markets, which are estimated simultaneously. The empirical results confirm that price volatility is a significant risk factor in Greek meat production and also provide useful implications about the cost factors of production. Furthermore, the empirical findings show that the last reform of the Common Agricultural Policy seems to have had a negative effect on beef and lamb production in Greece.