The World Meat Market and the Brazilian Economy: An Econometric Input-Output Analysis

Abstract

This chapter analyzes how changes in domestic and foreign macroeconomic variables can affect Brazilian meat exports and consequently the Brazilian economy, and how changes in the production process in the animal-raising sector, and the slaughter and meat processing industries affect their share in the Brazilian economy as well as those of other economic sectors. The analysis is conducted in two stages: initially, a vector auto-regression (VAR) model is used to evaluate the impact of changes in the domestic and foreign macroeconomic variables on Brazilian meat exports. Thereafter, the results obtained in the VAR model are applied in an input-output model to evaluate the changes in the levels of importance of the different production sectors, and especially in the animal-raising sectors and slaughter and meat processing industries. The results indicate that changes in macroeconomic variables can cause significant impacts on Brazilian meat exports, that, in turn, can affect the Brazilian economy mainly in the following sectors, corn farming, cattle, poultry and other animal-raising sectors, other farm products, chemistry, pharmacy and veterinary, plastic goods, beef, poultry and other meat process industries, other food products, commerce and transport, public utilities and services. Finally, changes in the production processes of the animal-raising sectors and slaughter and meat preparation industries do not affect their share in the Brazilian economy.