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The relationship between input-factor and output prices in commodity industries: The case of Norwegian salmon aquaculture

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  • Asche, Frank
  • Oglend, Atle

Abstract

Using the Norwegian salmon aquaculture as a case study, this paper examines the relationship between input-factor prices and cost driven output prices. We hypothesize that as variations in marginal productivity in an industry falls, the relative importance of input-factor price variations on unit production costs increases. For maturing commodity industries, price trends will go from productivity driven to input-factor price driven. Our empirical results indicate that the correlation between salmon price and feed input-factor prices (fishmeal, soybean meal and wheat) has increased in recent years. Consistent with a period of increased importance of feed costs to developments in salmon production costs, we find evidence of an emergent protein cointegration relationship between salmon, fishmeal and soybean prices. The paper provides an empirical framework to analyze changing relationship between output and input prices, and highlights some limits to inference using price analysis.

Suggested Citation

  • Asche, Frank & Oglend, Atle, 2016. "The relationship between input-factor and output prices in commodity industries: The case of Norwegian salmon aquaculture," Journal of Commodity Markets, Elsevier, vol. 1(1), pages 35-47.
    • Handle: RePEc:eee:jocoma:v:1:y:2016:i:1:p:35-47
    DOI: 10.1016/j.jcomm.2015.11.001
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    Cited by:

    1. Misund, Bård, 2018. "Common and fundamental risk factors in shareholder returns of Norwegian salmon producing companies," Journal of Commodity Markets, Elsevier, vol. 12(C), pages 19-30.
    2. Atle Oglend & Vesa-Heikki Soini, 2020. "Implications of Entry Restrictions to Address Externalities in Aquaculture: The Case of Salmon Aquaculture," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 77(4), pages 673-694, December.
    3. Onozaka, Yuko & Honkanen, Pirjo & Altintzoglou, Themistoklis, 2023. "Sustainability, perceived quality and country of origin of farmed salmon: Impact on consumer choices in the USA, France and Japan," Food Policy, Elsevier, vol. 117(C).
    4. Thanh Ngo & Hung V. Vu & Huong Ho & Thuy T. T. Dao & Hai T. H. Nguyen, 2019. "Performance of Fish Farms in Vietnam–Does Financial Access Help Improve Their Cost Efficiency?," IJFS, MDPI, vol. 7(3), pages 1-10, August.
    5. Dahl, Roy Endré & Jonsson, Erlendur, 2018. "Volatility spillover in seafood markets," Journal of Commodity Markets, Elsevier, vol. 12(C), pages 44-59.

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