Modelling The Dynamics Of Production Adjustment To Short-Term Market Shocks
AbstractModels of agricultural economics typically operate at an annual basis or in a static equilibrium framework where inputs, outputs and their prices may change considerably. Production dynamics, however, imply that models relying on spatial and temporal aggregation do not capture the effects of biological constraints in the short run. This paper examines short and long-term impacts of demand and production cost shocks in the pig sector. The analysis is carried out with a dynamic programming model which takes into account changes in export and domestic demand and market clearing price. It optimizes the supply of piglets on a monthly basis. Econometric techniques are used to estimate demand functions. Short-term negative market shocks can already have significant income effects to agricultural producers. We simulated effects of pig meat export bans of different degrees due to livestock epidemics. Full closure of export markets for six months cost pig sector €21 million.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by European Association of Agricultural Economists in its series 107th Seminar, January 30-February 1, 2008, Sevilla, Spain with number 6401.
Date of creation: 2008
Date of revision:
pig; demand; dynamic programming; export; livestock epidemics; price; supply; Demand and Price Analysis; Livestock Production/Industries; Production Economics; Risk and Uncertainty;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-25 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- M.-J. J. Mangen & A. M. Burrell, 2003. "Who gains, who loses? Welfare effects of classical swine fever epidemics in the Netherlands," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 30(2), pages 125-154, June.
- Pritchett, James G. & Thilmany, Dawn D. & Johnson, Kamina K., 2005. "Animal Disease Economic Impacts: A Survey of Literature and Typology of Research Approaches," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 8(01).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If references are entirely missing, you can add them using this form.