A Dynamic Quarterly Model of the Beef and Pork Economy

Abstract

NUMBER of people have used annual time series data to analyze demand for beef and pork. Less empirical work has been done on the determinants of their marketing margins or of meat inventories. Quarterly analysis of demand and of the marketing system for these two products is apt to be fruitful since intra-year seasonal variations in production, margins and prices may be just as great as inter-year variations in production and average prices, especially for pork. Meat packers and chain stores need short-term predictions as a basis for their pricing and inventory decisions. Agricultural price outlook workers are called upon to make predictions of farm prices for periods of less than a year. Quarterly models of the livestock marketing sector can be used by each of these groups. This paper reports the results of a study of the beef and pork marketing sector of the economy. Eight equations were estimated using quarterly time series data: (a) two consumer demand equations, (b) two meat inventory equations, (c) two farm-to-wholesale marketing margin equations and (d) two wholesale-to-retail marketing margin equations.1