Elasticity in the transmission of beef, pork and chicken prices

Brazilian agribusiness contributes essentially to the country’s economic development. Within this complex are the beef, pork and chicken chains, which contribute significantly to meat exports and domestic consumption, leveraging the local economy. The elasticity of price transmission within the three main chains - beef, pork and chicken - was analysed for the producer, wholesale and retail links, based on time series for the state of São Paulo from 1997 to 2013. The Auto Regressive Vector (ARV) or Error Correction Vector (ECV) model was proposed with a cointegration vector. This model was used because it makes it possible to verify influences between the links in the chain and the impulse response to shocks between the links. The variance decomposition showed that prices are formed at the wholesale level, as predicted by the theory. In conclusion, it can be seen that the pork chain behaves differently in terms of price transmission, concluding that consumption of this product in Brazil is new and is gradually increasing consumption of white meats and increasing production and exports.