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Fed Cattle Spatial Transactions Price Relationships

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  • Schroeder, Ted C.

Abstract

Delineation of geographic markets for fed cattle is essential in monitoring price behavior and determining geographic markets. This study uses transactions data from 28 U.S. fed cattle slaughter plants to determine the extent of the geographic market for fed cattle. Results indicate a national market for fed cattle with prices across most plants cointegrated. In addition, price discovery originates predominantly at plants located in Nebraska, and typically one-third of the total price adjustment to spatial integration occurs in one day.

Suggested Citation

  • Schroeder, Ted C., 1997. "Fed Cattle Spatial Transactions Price Relationships," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 29(2), pages 1-16, December.
    • Handle: RePEc:ags:joaaec:15055
    DOI: 10.22004/ag.econ.15055
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    1. Bailey, DeeVon & Brorsen, B. Wade, 1985. "Dynamics Of Regional Fed Cattle Prices," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 10(1), pages 1-8, July.
    2. Schroeder, Ted C. & Goodwin, Barry K., 1990. "Regional Fed Cattle Price Dynamics," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 15(1), pages 1-12, July.
    3. Barry K. Goodwin & Ted C. Schroeder, 1991. "Cointegration Tests and Spatial Price Linkages in Regional Cattle Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(2), pages 452-464.
    4. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    5. Clement E. Ward, 1992. "Inter-Firm Differences in Fed Cattle Prices in the Southern Plains," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(2), pages 480-485.
    6. Clement E. Ward, 1990. "Meatpacking plant capacity and utilization: Implications for competition and pricing," Agribusiness, John Wiley & Sons, Ltd., vol. 6(1), pages 65-73.
    7. Bedrossian, Arakel & Moschos, Demetrios, 1988. "Industrial Structure, Concentration and the Speed of Price Adjustment," Journal of Industrial Economics, Wiley Blackwell, vol. 36(4), pages 459-476, June.
    8. Ted C. Schroeder & Rodney Jones & James Mintert & Andrew P. Barkley, 1993. "The Impact of Forward Contracting on Fed Cattle Transaction Prices," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 15(2), pages 325-337.
    9. Jones, Rodney & Schroeder, Ted & Mintert, James & Brazle, Frank, 1992. "The Impacts of Quality on Cash Fed Cattle Prices," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 24(2), pages 149-162, December.
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    Cited by:

    1. Svanidze, Miranda & Götz, Linde, 2019. "Determinants of spatial market efficiency of grain markets in Russia," Food Policy, Elsevier, vol. 89(C).
    2. Li, Yunhan & Li, Wenying & Dorfman, Jeffrey H., 2017. "Examining Dynamically Changing Cattle Market Linkages with Inventory as Controlled Transitions," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 259151, Agricultural and Applied Economics Association.
    3. Muth, Mary K. & Liu, Yanyan & Koontz, Stephen R. & Lawrence, John D., 2008. "Differences in Prices and Price Risk Across Alternative Marketing Arrangements Used in the Fed Cattle Industry," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 33(1), pages 1-18, April.
    4. Xu, Xiaojie, 2014. "Price Discovery in U.S. Corn Cash and Futures Markets: The Role of Cash Market Selection," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169809, Agricultural and Applied Economics Association.
    5. Blank, Steven C. & Saitone, Tina L. & Sexton, Richard J., 2016. "Calf and Yearling Prices in the Western United States: Spatial, Quality, and Temporal Factors in Satellite Video Auctions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(3), pages 1-23.
    6. Franken, Jason R.V. & Parcell, Joseph L. & Sykuta, Michael E. & Fulcher, Christopher L., 2005. "Market Integration: Case Studies of Structural Change," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 34(2), pages 1-10, October.
    7. Dennis Sánchez-Navarro, 2012. "Una propuesta metodológica para la definición de mercados geográficos relevantes," Estudios Económicos SIC 10492, Superintendencia de Industria y Comercio.
    8. Svanidze, Miranda & Götz, Linde, 2019. "Spatial market efficiency of grain markets in Russia: Implications of high trade costs for export potential," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 21, pages 60-68.
    9. Pendell, Dustin L. & Schroeder, Ted C., 2006. "Impact of Mandatory Price Reporting on Fed Cattle Market Integration," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 31(3), pages 1-12, December.
    10. Blank, Steven C. & Saitone, Tina & Sexton, Richard & Kalotia, Kabir & Forero, Larry & Nader, Glenn, 2011. "Location and distance effects on western calf and yearling prices," 2011 Annual Meeting, June 29-July 1, 2011, Banff, Alberta,Canada 291744, Western Agricultural Economics Association.
    11. Schulz, Lee L. & Schroeder, Ted C. & Ward, Clement E., 2011. "Trade-Related Policy and Canadian-U.S. Fed Cattle Transactions Basis," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 36(2), pages 1-13, August.
    12. Raper, Kellie Curry & Cheney, Laura Martin & Punjabi, Meeta, 2000. "Assessing The Impact Of A Hog Slaughter Plant Closing: The Thorn Apple Valley Case," Staff Paper Series 11658, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    13. Fabio L. Mattos & Rodrigo Lanna Franco da Silveira, 2018. "The Expansion of the Brazilian Winter Corn Crop and Its Impact on Price Transmission," IJFS, MDPI, vol. 6(2), pages 1-17, April.
    14. Blank, Steven C. & Saitone, Tina L. & Sexton, Richard J., 2014. "Seller-Offered Forward Contracts: An Additional Benefit to Cattle Producers from Satellite Video Auctions," 2014 Annual Meeting, February 1-4, 2014, Dallas, Texas 162323, Southern Agricultural Economics Association.
    15. Lewis, Karen E. & Tonsor, Glynn T., 2011. "The Impact of Ethanol Production on Spatial Grain Market Relationships," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 14(4), pages 1-14, November.
    16. Xiaojie Xu, 2018. "Cointegration and price discovery in US corn cash and futures markets," Empirical Economics, Springer, vol. 55(4), pages 1889-1923, December.
    17. Sungill Han & Chanjin Chung & Prasanna Surathkal, 2017. "Impacts of Increased Corn Ethanol Production on Price Asymmetry and Market Linkages in Fed Cattle Markets," Agribusiness, John Wiley & Sons, Ltd., vol. 33(3), pages 378-402, June.

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