AN ERROR CORRECTION APPROACH TO MODELLING BEEF SUPPLY RESPONSE IN SOUTH AFRICA

This study modelled the supply response of beef in South Africa using the Error Correction Model (ECM). The ECM was the preferred model because it corrects for some of the limitations observed in previous studies that investigated the supply response of beef in South Africa. Using rainfall, real producers' price of beef, lamb, pork, chicken, yellow maize, imports and cattle population to represent climatic, economic, trade and demographic factors, respectively, as identified in the literature, the supply response of beef in South Africa was modelled as the number of cattle marketed for slaughtering. This article confirms that beef producers in South Africa respond to economic, climatic, trade and demographic factors in the long-run. In the short-run, however, the article shows that cattle marketed for slaughtering are responsive to climatic factors (i.e. rainfall) and imports of beef. Animal demographics, producer price of yellow maize and the producer price of beef were found not to have a short-run effect on cattle marketed for slaughtering.