The Effects of International Price Volatility on Farmer Prices and Marketing Margins in Cattle Markets

Author(s)
Morales, L Emilio
Publication Date
2018
Abstract
This study examines the effects of export price volatility in cattle markets using panel data from twelve countries between 1970 and 2013. Fixed-effects models with Driscoll and Kraay standard errors were estimated to control for cross-sectional dependence. Results indicate that price transmission depends on prices previously paid to farmers, variations in export prices and volatility of export prices, which reduces farmer prices in developed countries and it increases them in developing countries. In contrast, marketing margins are reduced by contemporaneous export price volatility and are increased by previous volatility. Exporters in developing countries take more time to transmit shocks in international prices, pay lower prices to farmers and absorb a bigger proportion of price fluctuations. These price transmission imperfections affect investments, technology adoption, production level and quality across the chain in developing countries, which negatively impact farmers, input and service providers, traders and other actors of the beef cattle chain.
Citation
International Food and Agribusiness Management Review, 21(3), p. 335-349
ISSN
1559-2448
1096-7508
Link
Publisher
International Food and Agribusiness Management Association (IFAMA)
Title
The Effects of International Price Volatility on Farmer Prices and Marketing Margins in Cattle Markets
Type of document
Journal Article
Entity Type
Publication

Files:

NameSizeformatDescriptionLink