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Vertical Price Transmission in the Canadian Beef Industry: Does the Canada-US Exchange Rate Matter?

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  • Fan, Jiaping
  • Anders, Sven
  • Qiu, Feng

Abstract

Cross-border trade with the United States is a crucial factor in the performance of the Canadian beef industry. While many studies have analyzed vertical price transmission in agricultural markets, studies that consider exogenous and trade-related information in the analysis of domestic vertical price relationships are missing. This study fills this gap by estimating regime-switching farm-to-wholesale price transmission in the Canadian beef industry using the Canadian-U.S. dollar exchange rate as the regime-inducing variable in a threshold vector error-correction model. We find that the exchange rate acts as a regime-inducing factor in the coordination between Canadian cattle producers and their packer buyers.

Suggested Citation

  • Fan, Jiaping & Anders, Sven & Qiu, Feng, 2022. "Vertical Price Transmission in the Canadian Beef Industry: Does the Canada-US Exchange Rate Matter?," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 23(01), June.
    • Handle: RePEc:ags:ecjilt:322778
    DOI: 10.22004/ag.econ.322778
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