Price transmission in the Swedish pig production : how has current price increases in an era of COVID-19 affect Swedish pig production?

Abstract: This thesis presents a price transmission analysis within the Swedish pig production sector. The aim of the study is to see if and how the recent years price increments of input prices has affected the Swedish slaughter prices, and consumer price index in Sweden, both in short and long term. The study uses secondary data from different sources, over the time period 2000-2021. This thesis helps to fill the gap in the literature regarding how Swedish pig production are affected by recent years increases in input prices. The study conducted unit-root, ADF-test and VAR model to establish if co-integration exists in the short-run. The results showed that there was no co-integration between markets in the short run. Johannsen’s approach for co-integration analysis was chosen for the long run, results showed co-integration in long run between input prices for both slaughter price and CPI. To examine how the input prices affect slaughter price and CPI, a VECM approach was used. For slaughter price, the input variables shown to have a positive impact were energy, soy and piglet. The price for fuel was shown to have negative impact on slaughter price. However, for CPI energy, soy, fodder and piglet price shown to have a negative impact, whilst fuel shown to affect CPI positively. A log-log model was used to establish the output elasticity for Swedish Pig Production, showing that energy, fuel and piglet was elastic whilst fodder was inelastic.