An Update and Re-Estimation of the ERS Livestock Baseline Model

This report describes a re-estimation of the Economic Research Service (ERS) domestic livestock baseline model. The model consists of production, demand, and price transmission sections for the beef, pork, broiler, and turkey sectors. The updated model largely maintains the overall structure of the current model and mainly focuses on re-estimating the equations with current data. However, major changes were made to the consumer demand part of the baseline model. The current model uses an “inverse demand” model. Inverse demand models take the quantities available to consumers and then calculate the prices that will make consumers buy those quantities. The version presented in this paper uses a quantity dependent system. The equations calculate how much beef, pork, chicken, and turkey consumers will want to buy given the prices of the four meats and consumer income. This updated livestock baseline model could aid the ERS in making ten-year projections for the United States livestock sector.