IMPACTS OF CORN AND SOYBEAN MEAL PRICE CHANGES ON THE DEMAND AND SUPPLY OF U.S. BROILERS

This study examined factors that affected the prices of corn and soybean meal and the impact of these prices on market demand and supply for U.S. broilers. An econometric model consisting of four structural equations and one identity was formulated and estimated using quarterly data from 1976 to 1996. One of the results reveals that soybean meal price flexibilities with respect to soybean prices were highly elastic in both the short and long run. This means that changes in soybean prices have a relatively large effect on meal price. In contrast, meal price and oil price moved in opposite directions. An increase in oil price encourages an increase in crushing oilseeds, resulting in an increase in both oil and meal supply. In addition, results indicated that a sustained increase in corn and soybean meal prices will have an immediate impact on broiler quantities and prices.