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This study investigates the dynamics of price transmission between the Canadian beef markets along the supply chain and the impact of bovine spongiform encephalopathy (BSE) on prices. Retail price models are estimated for the provinces accounting for the major share of national demand, while farm price models are estimated for the beef cattle producing provinces. A model for the processing level is also estimated with national industrial prices of beef and provincial farm prices of beef cattle. The results indicate that retail beef prices in the major consuming provinces adjust either faster or at a greater magnitude to increases in industrial prices than to decreases. Furthermore, industrial prices adjust faster and at a greater magnitude in response to rising farm prices of beef cattle in Ontario and Quebec than when they fall. The impact of BSE on retail prices has been small and negative for Alberta and Ontario, and positive for Quebec and British Columbia. The impact of BSE on industrial prices has also been small and positive. On the contrary, strong and sustained negative influence of BSE on farm prices is evident in the results for the beef cattle producing provinces.

Continued expansion of economic and security relations between Canada, United States, and Mexico are expected in the years to come. The United States is by far the largest export market for both Canada and Mexico with each nation exporting over 80% of their products to this large economy. However, trade between Canada and Mexico has also grown significantly since the implementation of the North American Free Trade Agreement (NAFTA) a decade ago. The two-way trade between Canada and Mexico has more than doubled from Cdn $6.5 billion in 1995 to Cdn $15.1 billion in 2002, according to official Statistics Canada trade statistics. A recent merchandise trade reconciliation study undertaken between Statistics Canada and a Mexican Working Group on Foreign Trade Statistics has determined that the two-way trade was closer to Cdn $19 billion in 2001. This result ranks Canada as Mexico's second most important export market and ranks Mexico as Canada's fourth most important export market in 2001. In comparison, Mexico was ranked as Canada's 15th most important export market in 1995. This research study provides an overview of the trading relationship between Canada and Mexico with particular emphasis on agricultural trade. Approximately one-fifth of Canadian exports to Mexico are agricultural goods. Therefore, it is important to both countries that awareness is generated as to the nature of our bi-lateral trade and the changing socio-economic conditions that will enhance or hinder our trading relationship.