Relative prices and relative supplies in the UK beef meat industry: A wavelet cross-correlation analysis

Abstract

The objective of the paper is to assess the contemporaneous and temporal links between the relative beef prices and the composition of beef supply (slaughters) in the UK, using weekly data and wavelet cross-correlation analysis. For female bovine animals (heifers and adult cows) and for most of the frequencies considered, the price ratio has a negative contemporaneous association with the supply ratio while for male bovine animals (steers and young bulls) it has a positive one. The difference in the sign of the contemporaneous link is in line with the argument in the Animal Economics literature that, while bovines (female or male) are both consumption and capital goods, the value of females as capital tends to be greater than that of males. Moreover, the contemporaneous links are asymmetric (i.e., their absolute magnitude depends on the frequency they are calculated). The temporal links are strong. For female bovines and for small frequencies, the relative prices are likely to lead relative supplies; for male bovines, it holds the opposite.