The impacts of disease shocks on the price volatility of China’s livestock products

Based on China’s major livestock product prices and the swine disease index from February 2009 to January 2020, and applying a TVP-VAR model with stochastic volatility, this paper empirically examined the time-varying impacts of the swine diseases including African swine fever on livestock product price volatility. Results show that the impacts of swine diseases including African swine fever on the livestock product price volatility had obvious time-varying effects, and it lasted a long time. Besides, the impacts of disease shocks caused the price of livestock product to rise. Especially, African swine fever had a significant impact on the price of livestock products, leading to the overall price rise of livestock products. However, the impacts of African swine fever on livestock product prices had slowed down recently. Moreover, the impacts of the disease shocks on pork price were significant, followed by that of chicken price. While the impacts on beef and lamb prices were relatively weak. Finally, there was no significant difference in the impacts of African swine fever and other swine diseases on the livestock product price volatility, indicating that the prevention and control of other diseases should be viewed as important as that of African swine fever. In order to reduce the impacts of African swine fever and other swine diseases on the livestock product price volatility, this paper provides the following suggestions: improving the market early warning mechanism to enhance the ability to cope with the disease shock, perfecting the policy support system to strengthen the capacity of the livestock product supply, and giving full play to the substitution effect to alleviate the contradiction between supply and demand of livestock products.