Farm and Retail Prices in the South African Poultry Industry:Do the Twain Meet?

摘要

The study intended to determine the producer (farm)-retail price transmission behavior in theSouth African poultry industry. At the heart of the study was to desire to establish whether therewas symmetry or asymmetry in the price transmission. Using price data from 2000 to 2010 andemploying both the Houck and Error Correction Model (ECM) approaches the study found thatthere was symmetry in the farm-retail price transmission of poultry in South Africa, where achange in farm price of chicken was observed to lead to a similar change in the retail price inSouth Africa. The price setting system in the poultry industry was further defined by estimatingelasticities of price transmission and it was found that retail price is very sensitive to change infarm price, particularly falling prices.