Effects of packers’ inventory and market power on price adjustments in the U.S. beef industry

Surathkal, Prasanna; Chung, Chanjin

doi:10.1080/00036846.2019.1610708

Cited by 10 publications

(7 citation statements)

References 45 publications

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“…Using a theoretical model, Reagan and Weitzman (1982) suggested that inventory management strategies of market actors could lead to APT. Such a relationship has been empirically confirmed for the Canadian chicken industry (Abbassi et al, 2012) and American beef industry (Surathkal and Chung, 2019).…”

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confidence: 70%

“…Differences in purchase location, supplier choice and market margin in the two markets suggest that retailers in Ibadan face less competition and have greater market power in determining price adjustments. In the USA, the role of market power in APT has also been confirmed in the strawberry market (Acharya et al, 2011), beef market (Surathkal and Chung, 2019) and fluid milk market (Liu et al, 2019). However, these findings were derived from a developed economy and by investigating a single market.…”

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confidence: 99%

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Vertical price transmission in the Nigerian cowpea market

Chien

Sakurai

et al. 2019

BFJ

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Purpose The purpose of this paper is to examine the asymmetry of vertical price transmission (i.e. from the wholesale to the retail market) in the Nigerian cowpea market and identify its causes. Design/methodology/approach The authors surveyed 19 markets in Kano and Ibadan from 2012 to 2015. The autoregressive distributed lag model and asymmetric error correction model were adopted to test the asymmetry of vertical price transmission. Findings Results suggest that price transmission in Kano is symmetric, but it is asymmetric in Ibadan. This distinction is caused by the differences in the market structure (in terms of competition level, inventory period and transaction cost) of these cities. Originality/value This is the first study to empirically investigate the vertical price transmission in two Nigerian cowpea markets. It is also the first to reveal the role of the market structure in price transmission through a comparison of two markets. The findings provide policy implications and will help create a more efficient food market in Nigeria.

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confidence: 70%

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confidence: 99%

Vertical price transmission in the Nigerian cowpea market

Chien

Sakurai

et al. 2019

BFJ

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“…No obstante, este efecto presenta significancia estadística sólo en el caso bovino. Estos resultados son consistentes con Acharya et al (2011), Surathkal & Chung (2019 Las asimetrías de corto plazo son definidas como la diferencia en la respuesta de los precios mayoristas a aumentos o disminuciones de los precios al productor. El coeficiente de cambio contemporáneo positivo β 1,0 es siempre significativo y muestra valores más grandes en el régimen alto que en el bajo, lo cual indica que los mayoristas (bovinos y porcinos) responden más prontamente en el régimen alto ante variaciones positivas de los precios al productor.…”

Section: B Resultados Tecmunclassified

“…M P t se representó mediante la elasticidad conjetural tiempo-variante mayorista/productor (Surathkal & Chung, 2019) obtenida según el modelo de ecuaciones simultáneas propuesto por Muth y Wohlgenant (1999) que, basado en la estimación por 3SLS de funciones de demanda y oferta, permite generar una variable proxy para la concentración de mercado en una industria con limitada disponibilidad de datos (ver Anexo).…”

Section: A Threshold Error Correction Model (Tecm)unclassified

Poder de mercado y transmisión asimétrica de precios en Chile: el caso de la carne bovina y porcina

Sepúlveda

2021

Lect. Econ.

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Este artículo examina el efecto del poder de mercado sobre la transmisión de precios productor-mayorista en las industrias de carne bovina y porcina chilena. Se utilizaron elasticidades conjeturales para representar el poder de mercado y se estimó un modelo de corrección de errores por umbral (TECM, por sus siglas en inglés) con tres regímenes para distinguir el comportamiento de ajuste de precios con relación al equilibrio de largo plazo. Los resultados indican que el poder de mercado tiene impacto significativo en el sector bovino cuando los precios se hallan en fase decreciente. En dicha fase, los mayoristas pueden ejercer poder de mercado para ralentizar el ajuste de precios y conservar márgenes de ganancia mayores durante más tiempo. La hipótesis de simetría de largo plazo es rechazada en el sector bovino cuando se incorpora el poder de mercado y no rechazada cuando se ignora en la especificación del modelo, sugiriendo transmisión asimétrica entre los regímenes bajo y alto. Este resultado, refuerza la idea que el poder de mercado mayorista produce asimetrías en el ajuste de precios que son régimen-dependientes sólo en el sector bovino.

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“…It suggests that market power can be reduced by the noisy signal of buyers or sellers according to the increasing competition between buyers [28]. Surathkal and Chung (2019) estimate the potency of packers' inventory and market power for price adjustments in the U.S. beef industry. Their results suggest that market power has an impact on asymmetric price transmission.…”

Section: Introductionmentioning

confidence: 99%

Market Power in the Irish Beef Processing Industry

Wang

2021

Sustainability

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Irish beef processors and cattle farmers have been involved in a lasting controversy on power asymmetry. This paper estimates the degree of market power in the Irish beef processing industry. The New Empirical Industrial Organization approach is extended for estimation, and the market power is testified by conjectural elasticity with supply and demand functions, indicating that beef processors exert a significant market power on cattle farms. Export-orientation and high subsidies are two outstanding features in the Irish beef industry. Exports and subsidies are shown in this paper to have an insignificant influence on market power. This paper confirms that beef processors can exercise market power on farmers to lower prices below the marginal cost.

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Effects of packers’ inventory and market power on price adjustments in the U.S. beef industry

Cited by 10 publications

References 45 publications

Vertical price transmission in the Nigerian cowpea market

Vertical price transmission in the Nigerian cowpea market

Poder de mercado y transmisión asimétrica de precios en Chile: el caso de la carne bovina y porcina

Market Power in the Irish Beef Processing Industry

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