Dynamic Analysis of Correlation between Swine and Feed Futures Prices— Based on VAR Model
Abstract
Vector Autoregression (VAR) model to investigate the interlinkages between the hog futures market and the pricing dynamics of hogs, corn,
and soybean meal. The study’s findings indicate that feed costs exert a notable predictive influence on the pricing of hogs. Furthermore, a
pronounced interdependence is observed between hog prices and the prices of grains, with the establishment of futures markets amplifying
this relationship. This underscores the pivotal role that futures markets play in facilitating price discovery and managing risk within the hog
industry’s value chain. The inception of futures markets has not only elevated the efficiency of market information dissemination but also endowed hog producers with a more accurate gauge of market expectations. These insights contribute to a deeper understanding of the intricate
dynamics governing the hog industry’s financial landscape.
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DOI: http://dx.doi.org/10.18686/fm.v9i3.12766
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