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Supply response on the Hungarian pork meat sector

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  • Bakucs, Lajos Zoltan
  • Markus, Richard

Abstract

Despite of the increasing production and consumption of white meats, pig breeding is still one of the most important animal husbandry sectors Worldwide and in the European Union as well. In Hungary over the past decades, the pig sector has undergone significant changes. The livestock has sharply decreased from more than 8.5 million in 1989 to 3.3 million in present. After the post 1989 increase of herd size bred in family farms, their share diminished, at present two-thirds of output is produced by corporate farms. It appears that small scale farming has major difficulties, they must consider all cost reducing alternatives to improve their competitiveness. With pressure on purchase prices from the downstream market levels, and considering that fodder represents about 50-60% within total production costs, in this paper we analyse the influence of these two factors upon pig breeding farmers’ supply response. We employ Vector Error Correction Model specification, following the theoretical model of Hallam and Zanoli, 1993. Estimated long-run elasticities highlight farmers’ reliance on live pigs for slaughter purchase price and soya fodder price.

Suggested Citation

  • Bakucs, Lajos Zoltan & Markus, Richard, "undated". "Supply response on the Hungarian pork meat sector," 2010 IAMO Forum, June 16-18, 2010, Halle (Saale), Germany 90808, Institute of Agricultural Development in Transition Economies (IAMO).
    • Handle: RePEc:ags:iamo10:90808
    DOI: 10.22004/ag.econ.90808
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    References listed on IDEAS

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    1. Hallam, David & Zanoli, Raffaele, 1993. "Error Correction Models and Agricultural Supply Response," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 20(2), pages 151-166.
    2. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
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