Food scares and price volatility: the case of German and Spanish pig chains

Tsion Assefa, Miranda Meuwissen and Alfons G.J.M. Lansink

No 210966, 2015 Conference, August 9-14, 2015, Milan, Italy from International Association of Agricultural Economists

Abstract: With the liberalization of EU agricultural markets, EU farmers are increasingly exposed to global and local market shocks. A major source of market shocks in the livestock sector is animal food scare. By applying the recently developed methodology of volatility response functions of Hafner and Herwartz (2006), we investigated how news of selected food scares affected price volatilities in the German and Spanish pig chains. Overall, the results suggest that the size of the shock matters for price volatility to increase in response to news of a food scare. Our results confirm that if the shock is large enough, news of food scares do increase price volatility. The results highlight the importance of price risk insurance for non-infected farms given the current opportunity to benefit from EU premium subsidies for such type of insurance.

Keywords: Food Consumption/Nutrition/Food Safety; Food Security and Poverty (search for similar items in EconPapers)
Pages: 21
Date: 2015
New Economics Papers: this item is included in nep-agr
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae15:210966

DOI: 10.22004/ag.econ.210966

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