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Price Discovery in the Egg Industry

Published online by Cambridge University Press:  15 September 2016

Leigh J. Maynard
Leigh J. Maynard*
Affiliation:
Department of Agricultural Economics and Rural Sociology at the Pennsylvania State University
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Abstract

Formula pricing of eggs is typically based on quotations issued by Urner Barry Publications, and egg producers worry that the quotes are systematically lower than equilibrium levels. Egg Clearinghouse, Inc. (ECI) provides a public forum for cash trading, intended to facilitate price discovery. Evidence from 1994–95 does not suggest that Urner Barry understates producer level prices on average. Granger causality tests indicate a feedback relationship between the Urner Barry quotes and ECI prices, with ECI leading during price upswings. Lead times appear to have fallen since the late 1970s and early 1980s, confirming earlier predictions regarding market efficiency.

Type
Articles
Information
Agricultural and Resource Economics Review , Volume 26 , Issue 1 , April 1997 , pp. 23 - 30
Copyright
Copyright © 1997 Northeastern Agricultural and Resource Economics Association 

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