The Effects on the Red Meats Prices of Feed Price: The Case of Turkey

Abstract

 Abstract - In this study, using Granger causality test and ARDL bounds testing method, we analyzed the price transmission mechanism between wholesale and retail red meat prices and the impact of some variables on red meat prices in Turkey. In the analysis, the prices of wholesale beef, retail beef prices, fattening feed, milk feed, wholesale milk, corn, retail chicken prices and exchange rate data were used. According to the results of the analysis, two-way causality relationship between wholesale and retail meat prices was observed. According to the ARDL short-term models, the retail price impact factor of the wholesale prices was 0.44 and the retail prices' wholesale price-affecting coefficient was 0.45. Therefore, these prices affect each other equally in the short term. According to the ARDL long-term models, the retail price impact factor for wholesale prices was 0.54, while the wholesale price of retail prices was estimated to be 0.87. In summary, there is a bi-directional interaction between wholesale beef prices and retail beef prices. Retail prices are more likely to influence wholesale prices. Therefore, there is an asymmetric price mechanism between wholesale and retail meat prices. This indicates the existence of incomplete competition conditions in the meat market.