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Impacts of COVID‐19 and Price Transmission in U.S. Meat Markets
Author(s) -
Ramsey A. Ford,
Goodwin Barry K.,
Hahn William F.,
Holt Matthew T.
Publication year - 2021
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/agec.12628
Subject(s) - covid-19 , transmission (telecommunications) , pace , economics , autoregressive model , monetary economics , econometrics , error correction model , psychological resilience , business , outbreak , cointegration , biology , geography , computer science , medicine , psychology , telecommunications , disease , geodesy , pathology , virology , infectious disease (medical specialty) , psychotherapist
Coronavirus 2019 (COVID‐19) has caused ongoing disruptions to U.S. meat markets via demand and supply‐side shocks. Abnormally high prices have been reported at retail outlets and meat packers have been accused of unfair business practices because of widening price spreads. Processing facilities have experienced COVID‐19 outbreaks resulting in shutdowns. Using weekly data on wholesale and retail prices of beef, pork, and poultry, we characterize the time series behavior and dynamic linkages of U.S. meat prices before the COVID‐19 pandemic. We model vertical price transmission using both linear and threshold autoregressive (AR) models and vector error correction (VEC) models. With the estimated models, we then compare price movements under COVID‐19 to model predictions. All three meat markets are well‐integrated and we observe unexpected, large price movements in April and May of 2020. Early COVID‐19 related shocks appear to be transitory with prices returning to expected levels at a pace consistent with the speed of transmission prior to the pandemic. This well‐functioning market process suggests a degree of resilience in U.S. meat supply chains.