Cycles in cattle and hog prices in South America

A. Fliessbach, R. Ihle

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

Prices of agricultural products often vary in relatively stable patterns around their long‐run trends. These variations translate into fluctuations of selling prices as well as farm revenues. We provide an overview of the current literature on agricultural price cycles. Using a transparent and reproducible model selection process and the Kalman filter, we select optimal models and estimate the cyclic patterns of hog and cattle prices for Brazil, Chile and Uruguay. Durations of those cycles are found to be about three years and seven years, respectively. These durations are in line with the literature and the biological characteristics of livestock production. Our results can inform producers forecasts on price developments in the short and medium run. They are useful for guiding policy makers on the timing of policy interventions for influencing the duration or the amplitudes of cycles.
Original languageEnglish
Pages (from-to)1167-1183
JournalThe Australian Journal of Agricultural and Resource Economics
Volume64
Issue number4
Early online date8 Sep 2020
DOIs
Publication statusPublished - Oct 2020

Keywords

  • cattle cycle
  • Kalman filter
  • porc cycle
  • price fluctuations
  • state-space models

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