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

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.


Issue Date:
Dec 21 2017
Publication Type:
Journal Article
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/269669
ISSN:
1559-2448
Language:
English
Published in:
International Food and Agribusiness Management Review, 21, 3
Page range:
335-349
JEL Codes:
M21; Q13; Q18




 Record created 2018-03-20, last modified 2020-10-28

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