BSE Disease Outbreaks, Structural Change and Market Power in the Canadian Beef Industry

J. Stephen Clark, Lukas Cechura and Adugna Berhanu
Authors registered in the RePEc Author Service: Adugna Berhanu Olani

No 114097, Working Papers from Structure and Performance of Agriculture and Agri-products Industry (SPAA)

Abstract: This study examines farm to wholesale prices spreads to measure the impact of the Bovine Spongiform Encephalopathy (BSE) disease outbreak on the Canadian beef industry. The study uses structure break tests developed by Gregory and Hansen (1996) and Hansen (1992) examine possible breaks within cointegrating relationships. The study finds evidence that the industry began a realignment as a result of the UK BSE disease outbreak, and the Canadian BSE disease outbreak was simply the largest realignment of the process beginning with the UK disease outbreak. However, the only statistically significant break was the BSE disease outbreak itself in May 2003. Stability was not restored until the border was reopened in 2005. Specific results indicated that the processing sector exploited the border closure in May 2003 to enhance its market power and that the system returned to a competitive one after the border re-opened in July 2005.

Keywords: Agribusiness; Industrial Organization; International Relations/Trade (search for similar items in EconPapers)
Pages: 16
Date: 2011-07
New Economics Papers: this item is included in nep-agr
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Persistent link: https://EconPapers.repec.org/RePEc:ags:spaawp:114097

DOI: 10.22004/ag.econ.114097

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