Short-Term Vertical Market Price Interrelationships of Beef and Pork

Monitoring short-term monthly farm to retail meat price margins requires knowing how rapidly price changes at the farm level are reflected at the wholesale and retail levels. Studies that have addressed this issue on a short-term basis have had varied conclusions. This study uses time series transfer functions and Granger causality to evaluate these intertemporal weekly price changes over the 1983 through 1985 period. The transfer functions indicated that live and wholesale beef prices were usually determined within the same week and live pork prices led wholesale pork prices by 2 to 3 weeks. Granger causality analyses indicated that farm beef and pork price changes led wholesale price changes by 4 weeks. Retail beef price changes lagged wholesale beef price changes by 3 weeks. Retail pork price changes lagged wholesale pork price changes by 3 to 5 weeks.