A Reexamination of a Popular Econometric Model of Pork Supply and Forecasting Performance vs. ARIMA and Composite Approaches

A Quarterly Model of the Livestock Industry by Richard P. Stillman provides a classic example of a structural model of key stages of pork production. Since the publication of the Stillman model in 1985, hog production has moved toward greater industrialization. Hence, structural change in key hog supply variables creates a need to update and reexamine this model and compare its forecasting ability to alternative formulations such as ARIMA and composite forecasts. Structural change was found to be present for sow farrowings, but less obvious for other key supply variables. The forecasting performance of the updated econometric model was strong in the presence of alternative forecasts for both one and four-step ahead horizons.