Poultry-Related Price Transmissions and Structural Change Since the 1950's

Abstract

We use a vector autoregression analysis of corn price, farm poultry price, and consumer poultry (meat) price for two periods, a mid-1950's to late 1960's period and an early 1970's to mid-1980's period. We explored the dynamic aspects of the estimated price transmission models of these two periods. Statistically significant evidence suggests a change in the dynamics of these price transmissions between the two periods. Price-increasing shocks to corn production are now more likely to be passed on to consumers more quickly as prices increase. Evidence also suggests that, since the early period, corn has become an increasingly important factor in explaining poultry prices, and substantial market change has occurred in the poultry industry at the retail level.