Canadian Hog Supply Respose: A Provincial Level Analysis
Canada’s hog sector has faced two decades of tumultuous growth, yet there are no recent estimates of supply response. A state-space model for hog supply response is developed that accounts for the time series properties of the data while accounting for a multiplicity of unspecified sources for structural change. A GARCH process is used to estimate expected price and price volatility to investigate the role of price risk. Surprisingly,the results indicate relatively inelastic own price elasticities that are consistent with prior studies conducted over more stable periods. This implies that price variations can have substantial effects on total profits and losses. The lack of sensitivity of quantities supplied can be explained in Quebec by the presence of the ASRA program. In other provinces, we conjecture that price expectations used by farmers are quite diffuse and that marginal changes in the mean (and variance) do not have much impact. The effects of risk for supply response appear quite muted and impacts of feed price risk are potentially bigger than hog price risk.
|Date of creation:||Feb 2013|
|Date of revision:|
|Contact details of provider:|| Web page: http://servsas.fsaa.ulaval.ca/index.php?id=12482&L=1|
References listed on IDEAS
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.:
- Gervais, Jean-Philippe & Lambert, Remy, 2010. "The Simple Economics of Hog Marketing Reforms in Quebec," Working Papers 102014, Structure and Performance of Agriculture and Agri-products Industry (SPAA).
- Bollerslev, Tim, 1986.
"Generalized autoregressive conditional heteroskedasticity,"
Journal of Econometrics,
Elsevier, vol. 31(3), pages 307-327, April.
- Tim Bollerslev, 1986. "Generalized autoregressive conditional heteroskedasticity," EERI Research Paper Series EERI RP 1986/01, Economics and Econometrics Research Institute (EERI), Brussels.
- Diebold, Francis X. & Pauly, Peter, 1988. "Endogenous risk in a portfolio-balance rational-expectations model of the Deutschemark-Dollar rate," European Economic Review, Elsevier, vol. 32(1), pages 27-53, January.
- Holt, Matthew T. & Moschini, GianCarlo, 1992.
"Alternative Measures Of Risk In Commodity Supply Models: An Analysis Of Sow Farrowing Decisions In The United States,"
Journal of Agricultural and Resource Economics,
Western Agricultural Economics Association, vol. 17(01), July.
- Moschini, GianCarlo & Holt, Matthew, 1992. "Alternative Measures of Risk in Commodity Supply Models: An Analysis of Sow Farrowing Decisions in the United States," Staff General Research Papers 11252, Iowa State University, Department of Economics.
- Robert Engle, 2001. "GARCH 101: The Use of ARCH/GARCH Models in Applied Econometrics," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 157-168, Fall.
- Rezitis, Anthony N. & Stavropoulos, Konstantinos S., 2009. "Modeling Pork Supply Response and Price Volatility: The Case of Greece," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 41(01), April.
- Jalles, Joao Tovar, 2009. "Structural Time Series Models and the Kalman Filter: a concise review," FEUNL Working Paper Series wp541, Universidade Nova de Lisboa, Faculdade de Economia.
- Harvey, Andrew, 1997. "Trends, Cycles and Autoregressions," Economic Journal, Royal Economic Society, vol. 107(440), pages 192-201, January.
- K. D. Meilke & A. C. Zwart & L. J. Martin, 1974. "North American Hog Supply: A Comparison Of Geometric And Polynomial Distributed Lag Models," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 22(2), pages 15-30, 07.
- Harvey, Andrew & Scott, Andrew, 1994.
"Seasonality in Dynamic Regression Models,"
Royal Economic Society, vol. 104(427), pages 1324-45, November.
- Mussell, Al, 2003. "PRICE DISCOVERY MECHANISMS AND ALTERNATIVES FOR CANADIAN AGRICULTURE; Part III: Applying Pricing Mechanisms," Miscellaneous Publications 18111, George Morris Center.
When requesting a correction, please mention this item's handle: RePEc:ags:spaawp:148590. See general information about how to correct material in RePEc.
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.