An Empirical Investigation of Live-hog Demand

An inverse live-hog demand model was estimated to analyze whether there has been a recent increase in the magnitude of livehog, own-quantity demand flexibility. Estimating the impact of processing capacity-utilization rate changes on live-hog prices was a second objective of this research. Results indicate live hog prices have become more responsive to changes in hog slaughter, slaughter weight, cold storage stocks, and changes in processing capacity-utilization. Finally, model results indicate the sharp increase in processing capacity-utilization rates, the increase in average dressed weight, and the increase in hog slaughter all had a negative effect on the live-hog prices.