A QUARTERLY ECONOMETRIC MODEL OF THE LIVESTOCK-FEED SUBSECTORS IN NEBRASKA AND THE REST OF THE UNITED STATES

The study used basic trade theory concepts to develop a dynamic, nonspatial econometric model to examine the interdependence between the livestock and feed sectors in Nebraska and the rest of the United States (ROUS). The model consists of 41 equations; 13 of which represent the feed grain, cattle and hog sectors of Nebraska; five represent the same three sectors in the ROUS; and the remaining form a joint commodity supply-demand submodel. Quarterly and annual time series data for the period 1970-1981 were utilized in the estimation of the model. Farm prices were determined by equilibrium conditions. The system contains one recursive and one simultaneous block. The recursive block was estimated by ordinary least squares; the simultaneous block by nonlinear three stage least squares. Because the model was nonlinear in the endogenous variables, the Gauss-Seidel numerical method was used for finding solutions to the equations. The dynamic multipliers gave the effect of changes in corn exports, low grade beef imports and fed beef exports on selected variables in Nebraska and the ROUS