Milk Price Volatility and its Determinants

The classified pricing of fluid milk under the Federal Milk Marketing Orders (FMMO) system combined with the cash settlement feature of Class IIII milk futures contracts generate a unique volatility pattern of these futures markets in the sense that the volatility gradually decreases as the USDA price announcement dates approaching in the month. Focusing on the evolution of volatility in Class III milk futures market, this study quantifies the relative importance of a set of factors driving milk price variation. While volatilities in both corn futures market and financial market Granger-cause the milk price volatility, the impact of financial market is more persistent. Besides embedded seasonality, market demand and supply conditions in the dairy market, cheese in this case, as well as changes in the U.S. exchange rates are found to have positive and statistically significant impacts on milk price volatility. While speculation positively affects milk futures markets, the effect was found insignificant.Cash settlement, impulse responses, milk pricing, realized volatility, speculation, Agricultural and Food Policy, Q11, Q14.,

The Long Run, Market Power and Retail Pricing

The paper uses the Johansen cointegration approach to analyse long-run pricing strategies of pork and chicken retailers in Austria. Long-run retail pricing strategy is found to be dependent on market share and price elasticity of demand for product. A combination of mark-up pricing strategy for pork and a competitive pricing strategy for chicken is considered by retailers to yield maximum profit. Long-run price adjustment reveals linkages to pricing strategy. The versatility of the Johansen cointegration technique as a tool capable of analysing both competitive and imperfect market situations is also revealed. The paper recommends meat policy to be product specific rather than holistic.Market power, Markup pricing, Cointegration, Long run

Integration of Agricultural Commodity Markets in Punjab

Efficiency of resource allocation in agriculture depends on the functioning of commodity markets. Although the larger markets that are better connected with the transport and communication network are expected to be well-integrated, the same cannot be said about the smaller, more remote markets. This paper tests integration of agricultural commodity markets in Southeastern Punjab. The region is located off the main trading axis of Pakistan, the Peshawar-Karachi highway, and is mostly served by relatively small markets known as mandis. This study focuses on markets for cotton, wheat, and rice in five towns in the region. Cotton and wheat are the main crops in the area while rice is mostly grown as part of crop rotation aimed at controlling salinity. The analytical framework developed by Ravallion was used to conduct tests of market integration for the three selected commodities. Within this framework, it is possible to test for short-run integration, long-run integration or complete market segmentation. The results indicate that, generally, markets are integrated only in the long run, with short-run integration limited to some special cases. Moreover, the smaller markets are more likely to be isolated as compared to the larger markets. The small markets also take longer to fully adjust to the price shock originating from a more dominant central market. Finally, in the case of rice, it is more likely that a market would be isolated if it were small. This implies that farmers’ incentives to grow rice as a means of combating salinity may be constrained by local demand conditions.

A Fish Is a Fish Is a Fish? Testing for Market Linkages on the Paris Fish Market

This paper applies both the Engle-Granger and Johansen cointegration test procedures to determine the existence of market linkage among high-valued {salmon and turbot) and low-valued (cod) fish species using monthly average wholesale price data recorded on the Paris fish market. We find that the price of salmon is determined exogenously to the system of prices examined and that the market for salmon is not linked to the markets for turbot or cod.Cointegration, market linkages, salmon price, Demand and Price Analysis, Environmental Economics and Policy,

Innovations and Progress in Seafood Demand and Market Analysis

The purpose of this paper is to review several economic studies which present a spectrum of interesting and creative approaches to analyzing the market for fish and seafood. These studies form a basis from which to offer recommendations for further improving analysis of fish demand and markets. We do so in an effort to advocate the potential of this area of research in the decisions which promote efficient use of the world's fisheries resources. Each of the reviewed approaches has its merits and limitations, depending on the issue at hand, quality of the data and skills of the researcher. The approaches are categorized as either demand studies following more traditional commodity market analysis methods or as market research studies.seafood, demand, marketing, international trade, Demand and Price Analysis, Environmental Economics and Policy, International Relations/Trade, Resource /Energy Economics and Policy,

The Economics of Water Resource Allocation: Valuation Methods and Policy Implications

In this chapter a ‘watershed economics approach’ that could be applied in Cyprus is proposed which is composed of two important stages. In Stage I economic valuation techniques are used to establish the economic value of the competing demands for surface and groundwater, incorporating where necessary an analysis of water quality. The valuation exercise allows the objective balancing of demands based upon the equi-marginal principle to achieve economic efficiency. In Stage II a policy impact analysis is proposed which addresses issues of social equity and the value of water for environmental/ecological purposes. The analysis is undertaken within the confines of the watershed; the most natural unit for the analysis of water allocation and scarcity since it determines the hydrological links between competing users and thus the impacts of one user upon another. The methodology is encapsulated by a case study of the Kouris watershed in Cyprus

STEER AND HEIFER PRICE DIFFERENCES IN THE LIVE CATTLE AND CARCASS MARKETS

A dynamic model is used to estimate quarterly price differences between steers and heifers in the feeder, slaughter, and carcass markets. For cattle within the same weight and grade range, their price differences are hypothesized to be influenced by seasonal, economic, and partly reflecting time changes in evaluation of steer and heifer quality in the live cattle and dressed meat trades. Stochastic factors are less prevalent at the feeder level, although risk of placing pregnant heifers in feedlots and weather are important. Steer and heifer inventories, slaughter prices, cost of gain, and margins explained most of the variation in feeder steer and heifer price differences.Livestock Production/Industries, Marketing,

Market-Oriented Strategies to Improve Household Access to Food: Experience from Sub-Saharan Africa

The objectives of this report are to identify market-oriented strategies to alleviate both chronic and transitory food insecurity, and to examine the interactions between short-run targeting mechanisms and longer-run strategies designed to alleviate the chronic causes of inadequate access to food. The main premise of the report is that sustained improvements in household access to food in Sub-Saharan Africa require the development of more reliable food and input markets that (a) create incentives to adopt cost-reducing investments at various stages in the food system; and (b) offer incentives for rural households to shift from a subsistence-oriented pattern of production and consumption to more productive systems based on specialization and gains from exchange. Sustained productivity growth in most parts of the world has typically entailed some form of structural transformation, which, in the historical development processes of other regions, has been a prerequisite for broad-based and sustained growth in productivity, real incomes and purchasing power throughout society. Structural transformation involves a movement away from subsistence-oriented, household-level production toward an integrated economy based on specialization and exchange. But specialization makes households dependent on the performance of exchange systems. The ability to capture the productivity gains from new technology and specialization thus depends on reducing the risks and uncertainty of market-based exchange, thereby facilitating greater participation in the types of specialized production and consumption patterns involved in the process of structural transformation. Section 3 presents empirical evidence from research conducted in Africa to draw conclusions about how the design of agricultural policies and transfer programs have affected household access to food in both rural and urban areas. Based on the foregoing, section 4 presents the following guidelines for the design of strategies to promote access to food in Africa: (1.) Focus on achieving productivity gains in the food system. (2.) Focus on how food and income transfer programs can be designed to promote the long-run development of the food system- the basis for providing food for most people over the long run in addition to providing food to people in the short run. (3.) Focus on reducing consumer food costs by expanding the range of products available to produce and consume. (4.) Focus on the cost and reliability of food supplies to rural areas as a component of non-farm, livestock, and other income diversification strategies designed to promote access to food over the longer run. (5.) Focus on developing local analytical expertise to help guide food system development.Food Security and Poverty, Downloads July 2008-June 2009: 12,

Dynamic supply chain decisions based on networked sensor data:An application in the chilled food retail chain

With large volume of product flows and complex supply chain processes, more data than ever before is being generated and collected in supply chains through various tracking and sensory technologies. The purpose of this study is to show a potential scenario of using a prototype tracking tool that facilitate the utilisation of sensor data, which is often unstructured and enormous in nature, to support supply chain decisions. The research investigates the potential benefits of the chilled food chain management innovation through sensor data driven pricing decisions. Data generated and recorded through the sensor network are used to predict the remaining shelf-life of perishable foods. Numerical analysis is conducted to examine the benefit of proposed approach under various operational situations and product features. The research findings demonstrate a way of modelling pricing and potential of performance improvement in chilled food chains to provide a vision of smooth transfer and implementation of the sensor data driven supply chain management. The research finding would encourage firms in the food industry to explore innovation opportunities from big data and develop proper data driven strategies to improve their competitiveness

Crucial relationship among energy commodity prices

This study investigates the short and long run relationship between crude oil, natural gas and electricity prices in US and in European commodity markets. The relationship between energy commodities may have several implications for the pricing of derivative products and for risk management purposes. Using daily price data over the period 2001-2009 we perform a correlation analysis to study the short run relationship, while the long run relationship is analyzed using a cointegration framework. The results show an erratic relationship in the short run while in the long run an equilibrium may be identi ed having di erent features for the European and the US markets.Energy, commodities, prices.