AN ANALYSIS OF THE IMPACT OF ENERGY PRICE ESCALATIONS DURING THE 1970S ON HAWAII BEEF PRODUCTION AND PRICES

A quarterly econometric model of the Hawaii beef production sector is estimated. Energy prices influence the model through Hawaii beef and feed prices which are a function of Mainland-to-Hawaii freight rates. Energy prices also influence the decision of whether to allocate feeder animals to feedlots or pasture. Through simulation, it was found that rapidly increasing energy prices after 1973 resulted in a 22 percent reduction in total Hawaii beef production. The composition of production also changed toward more grain fed and less grass fed beef. Given these results, other state and national beef modelers might find it useful to include energy prices in their models.