AN ANALYSIS OF DAILY FLUCTUATIONS IN HOG ECONOMY

A recursive model is developed to identify and evaluate the major factors affecting daily fluctuations in hog prices and quantities supplied. Using two years of data, packer price bids for slaughter hogs are found to depend upon lagged wholesale prices, present and lagged quantities of hogs marketed, and the day of the week. Producer's daily marketing responses depend upon lagged price, day of the week, and season of the year. Elasticity of supply is very high, ranging from 8 to 10. Daily ex post forecasts of price and quantity supplied are made for a one year period and indicate that variations in the regression coefficients from month to month, resulting from updating of the model, provide virtually no improvement of the forecasts over using an initial set of coefficients. The developed model predicts daily price fluctuations more accurately than a naive model tested. © 1969, Oxford University Press.