Price transmission in the beef value chain �?the case of Bloemfontein, South Africa

[摘要] The primary objective of the study was to analyse the nature of price transmission in theBloemfontein beef value chain. The deregulation of the South African agricultural market in 1996led to an unknown difference between the producer and retail prices of beef, which raisedconcerns among producers. These concerns were caused by the possibility of asymmetry in themarket, as the variation in the producer carcass (A2/A3) price and retail price does not alwaysreflect the same relationship. Producers believed that they were carrying all the risk and thatretailers fixed their prices, irrespective of the market price at that stage.The first sub-objective of this study was to determine the existence of a long term relationshipbetween producer and retail prices. Secondly, the short term nature of price transmission in thevalue chain was investigated to determine whether the marketing margin returned to the longterm equilibrium after short term shocks, and how this had taken place. Thirdly, the causality ofthe market was investigated to determine whether the casual flow of information was bidirectional,unidirectional or undirectional.The data preparation and the procedures applied to perform the analyses of this study, were thestationary test at levels and at first difference to eliminate any uneven data points or spikes thatmay skew results. To determine co-integration, four competing models (EG, M-TAR, TAR andMC-TAR) were applied to the three-year data. The model best suited to represent the level ofprice transmission for each specific data series, would be the one with the highest absoluteAkaike information criterion (AIC) value. After confirmation of co-integration and type oftransmission (symmetrical or asymmetrical), an error correction model (ECM) was matched withthose data series that confirmed asymmetrical price transmission. The error correction model examined the responsiveness of one price to changes in another price at a different level in thechain, thus reflecting the correction ability by speed and magnitude. Lastly, Granger causality wasused to analyse the direction of influence between the producer price and retail price.The results firstly confirmed the existence of a long term relationship between the producer andretail prices at all four retail outlets (S1, S2, S3 and B) of the Bloemfontein beef market. Theactual relationship of all four cases revealed an asymmetrical relationship, of which S1 and Bwere found to be positive asymmetric, while S2 and S3 were negative asymmetric, indicating thatthe market margin for S1 and B would thus increase (stretch) while the market margin for S2 andS3 would decline (shrink) in the long term.Secondly, the short term nature of price transmission among the various retailers also showedsignificant differences. S1 and B both reacted quicker and more circumspect to an increase in theproducer price than to a decrease. S2 and S3, on the other hand, reacted quicker and morecircumspect to a decrease in the producer price than to an increase. The response of S3 in thecase of a price increase was found to be insignificant.Thirdly, results on the flow of market information indicated, at significant levels, that a flow ofmarket information did exist in the markets of three of the four retailers. S1 exhibited significantbidirectional behaviour; S2 revealed undirectional flow of information and a unidirectionalinfluence was identified in the case of S3 and the butchery (B) where information flowed only fromthe producer to retailer.Despite the differences within different segments of the price transmission analyses, thetransmission for each retailer with regard to speed and magnitude remained asymmetrical.Asymmetrical price transmission is the change of the price relationship between the producer andretail prices over time. In the case of Bloemfontein, the price transmission relationship of two ofthe retailers were beneficial for consumers, as the marketing margin declined over time, while therelationship of the other two retailers were detrimental to consumers. The asymmetrical pricetransmission in the Bloemfontein market could thus not be viewed as a negative factor only. Itshould, however, be borne in mind that for a market to exist sustainably in the long term,symmetrical price transmission should be the norm �?as retailers with positive price transmissionwill price themselves out of the market, while the margin of those with negative price transmissionwill become so small, that they will be forced to close down.

[发布机构] University of the Free State