Time series analysis of the prices of broiler chicken in the Philippines, 1990-2015

Date

6-2016

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Cesar B. Quicoy

Abstract

The study analyzes the broiler chicken price behavior in the Philippines from the years 1990 to 2015. Specifically, it aimed to: 1) describe the trend in production, prices and consumption level of broiler chicken 2) analyze the degree of seasonal price variation 3) determine the farm to retail price spread 4) determine the elasticity of price transmission between the farm-gate and retail price and 5) identify the problems and give recommendations based from the findings of the study. Secondary data from the Bureau of Agricultural Statistics (BAS) on the production, prices (farm-gate and retail) and consumption of chicken were collected. Simple linear regression, percentages and growth rates were used to analyze the trend in production, prices and level of consumption of broiler chicken. Meanwhile, the degree of seasonal price variation was analyzed through the method of decomposition of time series of prices. Results showed that from 1990 to 2015, production and consumption trend of broiler chicken was generally increasing, however fluctuating with an annual average growth of 4.52% and 2.51% respectively. Similarly, the nominal farm-gate price for backyards and commercial broiler chicken also exhibited an increasing but fluctuating trend with an average growth of 4.54% and 2.56% per year, respectively. Nominal retail price of dressed and live broiler chicken showed a constantly increasing trend with an average growth of 4.54% and 2.56% per year, respectively. Nominal retail price of dressed and live broiler chicken showed a constantly increasing trend with a yearly average growth of 3.94% and 4.24% respectively. Meanwhile, the results of the linear regression showed that there was a significant association between production and time, between nominal prices and time, and between consumption and time for broiler chicken at 1% level of significance. The average seasonal price indices indicate that the highest price at the farm-gate level was observed during the month of January (97.24%) and March (95.81%) respectively. Meanwhile, at the retail level, highest price was also observed during the month of December for both prices of dressed (103.78%) and live (102.87%) chicken. Lowest price indices were experienced, however during the months of March (97.51%) and February (98.26%) for dressed and live respectively. From 1990 to 2015, farm to retail price spread for broiler chicken generally exhibited an increasing but fluctuating trend. Among the dressed and live weight of Php 12.19 per kilo per year. Meanwhile, the result of the elasticity of price transmission was less than one which only revealed that if retailers increased the retail price, transmission was less than one which only revealed that if retailers increased the retail price, the relative change in the farm-gate was lower than the relative change in the retail level. Thus, retail price seems to be more responsive to changes compared with the farm-gate price. Therefore, this study suggest that the government should continue in providing assistance, such as through cheap but high quality inputs, in order to improved production. Small backyard farmers were encouraged to join cooperatives and/or associations to increase their bargaining power. Additionally, local government units should make an effort to disseminate demand, supply and price information to the different market participants. Furthermore, policy makers should make an extra effort to make laws that would discourage the involvement of too much middlemen, who usually has the largest influence on the pricing of chicken on the market. Through time series analysis, evidences can be provided that would help policy makers and government units in formulating policies that will stabilize the prices of broiler chicken for the producers to determine and choose the best production and marketing options.

Language

English

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2016 A14 L47

Document Type

Thesis

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