Analysis of the Efficiency of Yellow Corn and Feed Wheat Price Linkages to Swine in Selected Provinces of the Philippines, 1990-2018

Date

7-2020

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Cenon F. Elca

Committee Member

Cenon F. Elca Antonio Jesus A. Quilloy, Agham C. Cuevas

Abstract

Feed is an important input to swine production. The link of the feed milling and swine industries are well established both in the literature and by practitioners. However, when prices of yellow corn are high, local traders may look for cheaper alternatives to yellow corn, one of which is feed wheat. Therefore, yellow corn and feed wheat prices are key information needed by marketing participants to make sound decisions, thereby optimizing their operations. This study analyzed the efficiency of yellow corn and feed wheat price linkages to swine in selected provinces of the Philippines.

The specific objectives of the study were to (1) determine the long-term trends in farmgate, retail, and wholesale prices of yellow corn and wholesale price of feed wheat, as well as the farmgate price of swine; (2) ascertain the effect of changes in the price of yellow corn at farmgate, wholesale, and retail levels to the farmgate price of swine; (3) assess the effect of changes in the price of feed wheat to the farmgate price of swine; (4) determine the efficiency of yellow corn price linkages to swine; and (5) draw policy recommendations based on the results of the study. The yellow corn and swine price data in Isabela, Cagayan, and Batangas used by the study were all time-series secondary data from the Philippine Statistics Authority. On the other hand, the adjusted price of feed wheat in Batangas was derived from the World Bank commodities price data. Graphical presentation of price trends, growth rates, Ravallion model, and Index of Market Connection were also Employed.

Price trends for yellow corn, feed wheat, and swine were generally increasing. However, there were specific years that indicated significant changes. Results of the Ravallion model showed that the farmgate price history of yellow corn had the strongest influence with the current farmgate price of swine than the wholesale and retail prices of yellow corn. Results also showed that the current price changes of wholesale price of feed wheat significantly influenced the formation of the current farmgate price of swine. With the use of Index of Market Connection, the results showed that the prices of yellow corn and feed wheat both have long-run relationships to the farmgate price of swine. There is also a lack of short-run integration between the farmgate price of swine with the price of yellow corn and wholesale price of feed wheat. In conclusion, the prices of yellow corn and wholesale price of feed wheat were slowly transmitted to the farmgate price of swine.

The study revealed the occurrence of price volatility of yellow corn and slow price transmission between yellow corn, feed wheat, and swine. This study recommends the following to address these problems: proper dissemination of information to farmers regarding the best time period to plant and harvest their produce, creation and development of new and existing infrastructures, and implementation of stricter adherence to standards in setting prices.

Language

English

LC Subject

Agricultural production

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2020 A14 I23

Document Type

Thesis

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