This thesis examines the pricing efficiency of the Quebec corn and soybean meal markets to answer a hypothesis on the part of the local livestock industry as to the existence of pricing inefficiency in the feed input industry. In evaluating the pricing efficiency of the markets, this research used two approaches: an analysis of market and an analysis using econometric models, focusing on price information structure accuracy and rapidity. The weekly data series of corn and soybean meal price are from selected cities in Canada and the US cover the crop years of 1990--1996. / The accuracy is addressed by applying Faminow's model for testing the pricing systems and Houck's model for testing price transmission symmetry. The results showed that the Quebec corn market is accurate based on the evidence of (i) a relatively unconcentrated market structure; (ii) evidence of an FOB pricing system; and (iii) symmetric price adjustments. Even though the soybean meal market is also based on an FOB pricing system, it is not accurate because the price adjustments are asymmetric and its market structure is highly concentrated. / The rapidity is addressed by applying Vector Error Correction (VEC) models in three ways: (i) by investigating the cointegration relationships, (ii) by assessing the strength of the relationships, and (iii) by measuring dynamic price response. The results showed that the strength of the relationships and the speed of Quebec corn price adjustment in response to external shocks are less than those found in Ontario and Southeastern US markets, while soybean meal is comparable to those markets. / Thus, by means of an assessment of market structure, marketing margin, price information transmission accuracy and rapidity, this research concludes that the corn market in Quebec is relatively pricing efficient while the soybean meal market is not.

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This thesis examines the efficiency of the price discovery mechanism in small regional markets utilizing the feed grain markets in the Maritime Provinces of Canada as a case study. Through the application of the Law of One Price (LOP), price transmission symmetry and Vector Error Correction Models (VEC), the author determined the price relationships that exist between the feed grain market in the Maritime Provinces and those in Western and Central Canada as external sources of supply. / The results suggest that there exists a relatively high degree of arbitrage between Maritime feed grain prices and those of Thunder Bay or Chatham for equivalent quality, price transmission being strictly from West to East. Although the LOP hypothesis must be rejected in the short run, in most cases, it was found to hold in the long run. Local markets appear to be highly integrated and price adjustment occurs within a period of four to six weeks, generally corresponding to the lead time of feed grain orders and transportation from Western Canada. A price transmission analysis found no evidence of the exercise of market power in the pricing of local grain. / In general, the pricing of local grains in the Maritimes may be judged as efficient considering that the lag in price response corresponds to the replacement period for Western grains.

Ruminant feed supplements are price sensitive and are effected by the continuous fluctuation of other raw material feed prices. Therefore, improving the efficiency of production and reducing cost of supplement concentrates for dairy cows are becoming increasingly important both for the smallholder and commercial dairy farmer. This can be overcome by replacing expensive energy and protein feeds with cheaper by-products. During periods of high maize prices, replacing maize with lower cost high fibre by-products becomes an economically viable option. Palm kernel expeller (PKE) fits the profile of a low cost, high fibre by-product. The aim of this study was to determine the effect of different inclusion levels of PKE in dairy concentrates for Jersey cows on milk production, milk composition, body weight (BW) and body condition score (BCS) change, rumen parameters and in situ ruminal kikuyu/ryegrass pasture degradability of dry matter (DMd) and neutral detergent fibre (NDFd) as well as NDFd rate (NDF kd). The study was conducted at the Outeniqua Research Farm situated near George in the Western Cape and cows grazed high quality kikuyu/ryegrass pasture during spring. Forty eight multiparous high producing Jersey cows were blocked according to 4% fat corrected milk (FCM), days in milk (DIM) and lactation number and randomly allocated to three treatments (control, low PKE, and high PKE). The PKE inclusion level in the control, low PKE, and high PKE treatment concentrates was 0, 20, and 40%, respectively. The PKE replaced part of the maize and protein sources in the concentrate. Milk yield was recorded daily and milk composition was determined in two week intervals over a 60 d period, after a 21 d adaptation period. Additionally, eight lactating rumen-fistulated cows were randomly allocated to the control and high PKE treatment in a two period crossover design. Ruminal pH, volatile fatty acids (VFA’s), ruminal ammonia-nitrogen (NH3-N), and in situ ruminal kikuyu/ryegrass pasture DMd, NDFd and NDF kd were measured. Cows received 6 kg (as is) concentrate per day divided over two milking periods and strip grazed kikuyu/ryegrass pasture as one group. Milk yield and milk fat content did not differ (P > 0.05) between treatments and were 21.3, 21.3 and 20.7 kg/cow/d and 4.63, 4.65, and 4.66% for cows receiving the control, low PKE and high PKE treatments, respectively. Milk protein, milk urea nitrogen (MUN), BW and BCS did not differ (P > 0.05) between treatments. Total VFA’s, average ruminal pH, ruminal NH3-N, and in situ ruminal kikuyu/ryegrass pasture DMd and NDFd as well as NDF kd did not differ (P > 0.05) between treatments. The acetic to propionic acid ratio was, however, higher (P < 0.05) for cows supplemented with the high PKE treatment. It can be concluded that partial replacement of maize with 20 or 40% PKE in a lactating dairy cow concentrate did not affect milk yield, milk fat content, milk protein content, somatic cell count (SCC), BW, or BCS. Rumen fermentation was unaffected and a healthy rumen environment was sustained. The replacement of higher cost maize and soybean oilcake by a lower cost PKE decreased feed cost. It is however not recommended to include PKE at 40% in the concentrate due to the increased time spent by cows in the milking parlour and the low palatability of PKE, which could lead to the tendency of increased concentrate refusals. It can be extrapolated from the data obtained from this study that milk production will be sustained when PKE is fed to cows on pasture at 2.4 kg/cow/day. / Dissertation (MSc Agric)--University of Pretoria, 2013. / gm2014 / Animal and Wildlife Sciences / unrestricted

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