THE IMPACT OF PROVINCIAL MARKETING BOARDS ON PRICE RELATIONS AND PRICING DYNAMICS IN THE NORTH-AMERICAN SLAUGHTER HOG MARKET

Canadian provincial hog marketing boards act as sales agents for hog producers. The hypothesis that the introduction of marketing boards in Alberta, Manitoba and Saskatchewan between 1969 and 1972 created seller side market power is tested and supported: their hog prices rose to levels comparable to Ontario where a marketing board had been in place. Organized sellers can also influence pricing dynamics because of the linked spatial oligopsonistic nature of the hog packing industry. Cointegration tests and variance decompositions indicate that establishing boards in the surplus producing western provinces made them relatively less isolated from pricing innovations in deficit producing eastern Canada.