How Retail Beef And Bread Prices Respond To Changes In Ingredient And Input Costs
by Departm Economic Research Service (ers) 2021-01-01 10:00:48
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The extent to which cost changes pass through a vertically organized production process depends on the value added by each producer in the chain as well as a number of other organizational and marketing factors at each stage of production. Using 36 y... Read more
The extent to which cost changes pass through a vertically organized production process depends on the value added by each producer in the chain as well as a number of other organizational and marketing factors at each stage of production. Using 36 years of monthly Bureau of Labor Statistics price indices data (1972-2008), we model pass-through behavior for beef and bread, two retail food items with different levels of processing. Both the farm-to-wholesale and wholesale-to-retail price responses are modeled to allow for the presence of structural breaks in the underlying long-term relationships between price series. Broad differences in price behavior are found not only between food categories (retail beef prices respond more to farm-price changes than do retail bread prices) but also across stages in the supply chain. While farm-to-wholesale relationships generally appear to be symmetric, retail prices have a more complicated response behavior. For both bread and beef, the passthrough from wholesale to retail is weaker than that from farm to wholesale. Less
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  • Print pages
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  • ISBN
  • 9.69 X 7.44 X 0.08 in
  • 38
  • BiblioGov
  • October 18, 2012
  • English
  • 9781249884125
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