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Impact of Mandatory Price Reporting on Hog Market Integration

Published online by Cambridge University Press:  26 January 2015

Jason R.V. Franken ,
Joe L. Parcell  and
Glynn T. Tonsor
Jason R.V. Franken
Affiliation:
Department of Agricultural and Applied Economics, University of Missouri, Columbia, Missouri
Joe L. Parcell
Affiliation:
Department of Agricultural and Applied Economics, University of Missouri, Columbia, Missouri
Glynn T. Tonsor
Affiliation:
Department of Agricultural Economics, Kansas State University, Manhattan, Kansas
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Abstract

This research examines whether mandatory price reporting (MPR) impacted price relationships among U.S. hog markets. Markets are cointegrated before and after MPR enactment, but not fully integrated in either period. Terminal markets adjust to shocks in the Iowa-Southern Minnesota market more quickly and Iowa-Southern Minnesota prices adjust to shocks in terminal markets more slowly following MPR enactment. Granger causality tests indicate a causal flow from terminal markets to Iowa-Southern Minnesota prices before MPR and a causal reversal after MPR enactment. These results likely reflect decreases in volume of negotiated sales, particularly in terminal markets, and greater reliance on mandatorily reported prices for market information.

Keywords

cointegrationhog marketsmandatory price reportingmarket integrationregime shiftQ13
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 43 , Issue 2 , May 2011 , pp. 229 - 241
Copyright
Copyright © Southern Agricultural Economics Association 2011

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