The demand for fish meal in the U.S., 1949-73
The general objective of this study is to estimate the U.S. demand for fish meal. Since fish meal is a feed input which is primarily used in broiler production, a demand equation for a feed input is estimated using a Nerlovian lag model. Deflated and non-deflated demand equation are estimated for the 1949-73 period by the ordinary least square technique. The variables are expressed in linear and linear-log form.
The F test (21.05) is significant at the a.aas level, indicating that the parameter of all the predetermined variables cannot be considered equal to zero. Based on the coefficient of determination 90 percent of the variation in the quantity demanded of fish meal is accounted for by the predetermined variables.
Based on t-tests, the estimated coefficients of the price of broilers and the price of soybean meal variables were significantly greater than zero at the 0.0005 level. The coefficients of the price of fish meal and the price of baby chicks were significantly less than zero at the 0.0005 level. The coefficient of the time variable was significantly different from zero at the 0.05 level. The coefficient of the time variable was significantly different from zero at the 0.05 level. The coefficient of the price of corn variable was significantly less than zero at the 0.10 level. The coefficient of the lagged quantity of fish meal disappearance was significantly greater than zero at the 0.025 level.
Some conclusions drawn from the results of this study are: (1) the cross-elasticity of the quantity of fish meal with the price of soybean meal is inelastic -0.663 in the short-run but 1.045 in the long-run; (2) the elasticity of adjustment of the broiler industry is 0.64; (3) the price of fish meal is inelastic (-0.889) in the short-run and elastic (-1.4) in the long-run; (4) the price of broilers has a positive effect on the quantity of fish meal demanded; (5) the price of corn and the price of baby chicks have a negative effect on the quantity of fish meal demanded; and, (6) According to the elasticities, the most important variables are: the lagged price of broiler and the price of baby chicks. Consequently the demand for fish meal depends heavily on the broiler industry.