| Summary: | This thesis examines the pricing efficiency of the Quebec corn and soybean meal markets to answer a hypothesis on the part of the local livestock industry as to the existence of pricing inefficiency in the feed input industry. In evaluating the pricing efficiency of the markets, this research used two approaches: an analysis of market and an analysis using econometric models, focusing on price information structure accuracy and rapidity. The weekly data series of corn and soybean meal price are from selected cities in Canada and the US cover the crop years of 1990--1996. === The accuracy is addressed by applying Faminow's model for testing the pricing systems and Houck's model for testing price transmission symmetry. The results showed that the Quebec corn market is accurate based on the evidence of (i) a relatively unconcentrated market structure; (ii) evidence of an FOB pricing system; and (iii) symmetric price adjustments. Even though the soybean meal market is also based on an FOB pricing system, it is not accurate because the price adjustments are asymmetric and its market structure is highly concentrated. === The rapidity is addressed by applying Vector Error Correction (VEC) models in three ways: (i) by investigating the cointegration relationships, (ii) by assessing the strength of the relationships, and (iii) by measuring dynamic price response. The results showed that the strength of the relationships and the speed of Quebec corn price adjustment in response to external shocks are less than those found in Ontario and Southeastern US markets, while soybean meal is comparable to those markets. === Thus, by means of an assessment of market structure, marketing margin, price information transmission accuracy and rapidity, this research concludes that the corn market in Quebec is relatively pricing efficient while the soybean meal market is not.
|
|---|
