Measuring Price Spreads in Red Meat

Abstract

<p>High and increasing price spreads in red meat often lead to controversy—livestock producers tend to blame low livestock prices on high price spreads, and consumers blame high retail prices on high price spreads. Increasing price spreads can both inflate retail prices and deflate farm prices. The intertemporal relationships among live, wholesale, and retail beef and pork prices are important issues in effectively analyzing and monitoring the efficiency and equity of the red meat marketing system. Knowledge of how these prices react to one another is useful for private as well as public policy decision making.</p>