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Author

Zishun Zhao

Document Type

Thesis - University Access Only

Award Date

2001

Degree Name

Master of Science (MS)

Department

Economics

First Advisor

Nicole Klein

Abstract

In 1998, the U.S. hog price hit its lowest level since World War IT at the same time the U.S. dollar reached its 100-year high against the Canadian dollar. The U.S. dollar appreciation was blamed as a factor that caused the hog price crisis and increasing trade deficit of live hogs, which directs our interest to the effects of exchange rate fluctuations on the live hog trade between the U.S. and Canada. We examine both the live hog trade market and the U.S. pork market with Vector Auto-Regression (VAR) models to find out how and to what extent the exchange rate fluctuations affect the prices and trade flow. The results show that an appreciation of the U.S. dollar does lower the U.S. live hog price, but not directly. The hog price is lower because the appreciation drives down the pork price. The exchange rates do not have much influence on the trade flow. On the contrary, the widening gap between Canadian hog production and slaughter capacity causes the Canadian hog producers to send an increasing number of their hogs to the U.S.

Library of Congress Subject Headings

Swine -- Prices -- United States
Swine -- Prices -- Canada
Foreign exchange rates
United States -- Foreign economic relations -- Canada
Canada -- Foreign economic relations -- United States

Format

application/pdf

Publisher

South Dakota State University

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