Geographical Price Transmission in European Farming Markets, as Exemplified by the Slaughter Pig Market after the EU's Eastern Enlargement

The accession by ten countries to the European Union in May 2004 and Bulgaria and Romania joining in January 2007 eliminated trade barriers between the old and new members as well as those between the new ones. The study analyses the effect of their accession on the integration of the pig market in the EU. According to its findings, the speed of price transmission correlates positively with the volume of pig trading between two countries. Moreover, intraregional price transmission between old members or between new members progresses faster than interregional price transmission between old and new members. Producer prices adjust to price changes in the old members more quickly in the new members and vice versa. Furthermore, price transmission is quicker between countries of the euro area and between members sharing a border. The strength of these effects has changed predictably in the years since accession in which an increasingly integrated European market for pork has developed.