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The Effect of the Livestock Mandatory Reporting Act on Market Transparency and Grid Price Dispersion

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  • Fausti, Scott W.
  • Qasmi, Bashir A.
  • Li, Jing
  • Diersen, Mathew A.

Abstract

The Livestock Mandatory Reporting Act (MPR) of 1999 was implemented in April 2001. Empirical evidence indicates a significant change in intra-week price dispersion associated with publicly reported fed cattle grid premiums and discounts occurring after MPR implementation. The research objective is to evaluate the effect of increased market transparency resulting from implementation of MPR, on grid intra-week premium and discount dispersion levels. Empirical results suggest that increased transparency is compatible with intra-week dispersion levels increasing. Increased dispersion suggests that during the pre-MPR period weekly premium and discount data may have been drawn from a non-representative sample. From the empirical evidence, it is concluded that reform of the livestock price-reporting system appears to have been necessary in the case of publically reported grid premiums and discounts.

Suggested Citation

  • Fausti, Scott W. & Qasmi, Bashir A. & Li, Jing & Diersen, Mathew A., 2010. "The Effect of the Livestock Mandatory Reporting Act on Market Transparency and Grid Price Dispersion," Agricultural and Resource Economics Review, Cambridge University Press, vol. 39(3), pages 457-467, October.
    • Handle: RePEc:cup:agrerw:v:39:y:2010:i:03:p:457-467_00
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    References listed on IDEAS

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    1. Sarah Grunewald & Ted C. Schroeder & Clement E. Ward, 2004. "Cattle Feeder Perceptions of Livestock Mandatory Price Reporting," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 26(4), pages 521-538.
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    Cited by:

    1. Franken, Jason R.V. & Parcell, Joseph L. & Tonsor, Glynn T., 2011. "Impact of Mandatory Price Reporting on Hog Market Integration," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 43(2), pages 1-13, May.
    2. Franken, Jason R.V. & Parcell, Joseph L., 2012. "Evaluation of Market Thinness for Hogs and Pork," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 44(4), pages 1-16, November.
    3. Fausti, Scott W. & Wang, Gerald & Diersen, Matthew A. & Qasmi, Bashir A., 2012. "Pricing Fed Cattle on a Grid: An Analysis of the Incentive Mechanism over Time," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119670, Southern Agricultural Economics Association.
    4. Gloria Solano Hermosilla & Pavel Ciaian & Jonas Kathage, 2019. "Market transparency: Costs of external data reporting by private operators in the EU agri-food supply chain - A survey-based analysis," JRC Research Reports JRC116927, Joint Research Centre.
    5. Chanjin Chung & Johnna Rushin & Prasanna Surathkal, 2018. "Impact of the livestock mandatory reporting act on the vertical price transmission within the beef supply chain," Agribusiness, John Wiley & Sons, Ltd., vol. 34(3), pages 562-578, June.
    6. Koontz Stephen R & Ward Clement E, 2011. "Livestock Mandatory Price Reporting: A Literature Review and Synthesis of Related Market Information Research," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 9(1), pages 1-33, July.

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