IDEAS home Printed from https://ideas.repec.org/p/ags/msaesp/305569.html
   My bibliography  Save this paper

Adding Weight to a Thinning Live Cattle Market

Author

Listed:
  • Brester, Gary W.
  • Swanser, Kole
  • Crosby, Brett

Abstract

ADDING WEIGHT TO A THINNING LIVE CATTLE MARKET Abstract Many segments of the beef cattle industry have raised concerns that the live cattle negotiated market has become so thin that it no longer reflects underlying beef supply and demand fundamentals. The percentage of live cattle procured through negotiations has declined to about 15% while the percentage procured through formulas has increased to almost 70%. Proposed legislation mandating that a larger percentage of live cattle be procured through negotiations represent a market intervention. We show that live cattle futures market prices could be used as a base in formulas and would be less restrictive in meeting specific cattle procurement percentages. Key Words: cattle prices, mandatory price reporting, thin markets JEL Codes: Q11, Q13, Q18

Suggested Citation

  • Brester, Gary W. & Swanser, Kole & Crosby, Brett, 2020. "Adding Weight to a Thinning Live Cattle Market," MSU Staff Papers 305569, Montana State University > Department of Agricultural Economics and Economics.
    • Handle: RePEc:ags:msaesp:305569
    DOI: 10.22004/ag.econ.305569
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    References listed on IDEAS

    as
    1. Cheryl J. Wachenheim & Eric A. DeVuyst, 2001. "Strategic response to mandatory reporting legislation in the U.S. livestock and meat industries: Are collusive opportunities enhanced?," Agribusiness, John Wiley & Sons, Ltd., vol. 17(2), pages 177-195.
    2. William G. Tomek, 1980. "Price Behavior on a Declining Terminal Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(3), pages 434-444.
    3. Zeileis, Achim & Leisch, Friedrich & Hornik, Kurt & Kleiber, Christian, 2002. "strucchange: An R Package for Testing for Structural Change in Linear Regression Models," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 7(i02).
    4. Stigler, George J., 2011. "Economics of Information," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 5, pages 35-49.
    5. 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.
    6. Zeileis, Achim & Kleiber, Christian & Kramer, Walter & Hornik, Kurt, 2003. "Testing and dating of structural changes in practice," Computational Statistics & Data Analysis, Elsevier, vol. 44(1-2), pages 109-123, October.
    7. Zeileis, Achim, 2004. "Econometric Computing with HC and HAC Covariance Matrix Estimators," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 11(i10).
    8. 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.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gary W. Brester & Kole Swanser & Brett Crosby, 2021. "Adding Weight to a Thinning Live Cattle Market," MSU Staff Papers 310364, Montana State University > Department of Agricultural Economics and Economics.
    2. Zeileis, Achim, 2006. "Implementing a class of structural change tests: An econometric computing approach," Computational Statistics & Data Analysis, Elsevier, vol. 50(11), pages 2987-3008, July.
    3. 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.
    4. Pozo, Veronica F. & Bejan, Vladimir & Tejeda, Hernan, 2016. "Disentangling Supply and Demand Shocks to Identify Changes in the Live Cattle’s Market Structure Post Livestock Mandatory Price Reporting Act," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236234, Agricultural and Applied Economics Association.
    5. Fausti, Scott W. & Diersen, Matthew A. & Qasmi, Bashir A., 2007. "Public Price Reporting in the Cash Market for Live Cattle: A Spatial Market Approach," Agricultural and Resource Economics Review, Cambridge University Press, vol. 36(2), pages 336-348, October.
    6. Joseph, Kishore & Garcia, Philip & Peterson, Paul E., 2016. "Does the Boxed Beef Price Inform the Live Cattle Futures Price?," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236166, Agricultural and Applied Economics Association.
    7. Patrik Nosil & Zachariah Gompert & Daniel J. Funk, 2024. "Divergent dynamics of sexual and habitat isolation at the transition between stick insect populations and species," Nature Communications, Nature, vol. 15(1), pages 1-15, December.
    8. James Nolan & Zoe Laulederkind, 2022. "Plane to See? Empirical Analysis of the 1999–2006 Air Cargo Cartel," Advances in Airline Economics, in: The International Air Cargo Industry, volume 9, pages 241-262, Emerald Group Publishing Limited.
    9. Ashok Chanabasangouda Patil & Shailesh Rastogi, 2020. "Multifractal Analysis of Market Efficiency across Structural Breaks: Implications for the Adaptive Market Hypothesis," JRFM, MDPI, vol. 13(10), pages 1-18, October.
    10. Fausti, Scott W. & Diersen, Matthew A. & Sun, He, 2003. "Discontinued Voluntary Price Reports For Live Cattle: Will They Be Missed By Producers?," Economics Staff Papers 32019, South Dakota State University, Department of Economics.
    11. Bernd Jost, 2012. "Price Dispersion, Search Costs and Spatial Competition: Evidence from the Austrian Retail Gasoline Market," NEURUS papers neurusp166, NEURUS - Network of European and US Regional and Urban Studies.
    12. João Sousa Andrade & Adelaide Duarte & Marta Simões, 2011. "Inequality and Growth in Portugal: a time series analysis," GEMF Working Papers 2011-11, GEMF, Faculty of Economics, University of Coimbra.
    13. de Silva, Ashton J & Boymal, Jonathan & Potts, Jason & Thomas, Stuart, 2015. "Does innovation in residential mortgage products explain rising house prices? No," MPRA Paper 62548, University Library of Munich, Germany.
    14. DIMA, Bogdan & DIMA, Ştefana Maria & IOAN, Roxana, 2021. "Remarks on the behaviour of financial market efficiency during the COVID-19 pandemic. The case of VIX," Finance Research Letters, Elsevier, vol. 43(C).
    15. Fausti, Scott W. & Qasmi, Bashir A. & Landblom, Douglas G. & Beutler, Martin & Johnson, Patricia S. & Gates, Roger N. & Patterson, Hubert H. & Salverson, Robin R., 2007. "Public Price Reporting, Marketing Channel Selection, and Price Discovery: The Perspective of Cow/Calf Producers in the Dakotas," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 25(1), pages 1-18.
    16. Abhijit Sharma & Kelvin G Balcombe & Iain M Fraser, 2009. "Non-renewable resource prices: Structural breaks and long term trends," Economics Bulletin, AccessEcon, vol. 29(2), pages 805-819.
    17. Zeileis, Achim & Koenker, Roger, 2008. "Econometrics in R: Past, Present, and Future," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 27(i01).
    18. Schroeder, Ted C. & Tonsor, Glynn T. & Coffey, Brian K., 2019. "Commodity futures with thinly traded cash markets: The case of live cattle," Journal of Commodity Markets, Elsevier, vol. 15(C), pages 1-1.
    19. Fabio Clementi & Marco Gallegati & Mauro Gallegati, 2015. "Growth and Cycles of the Italian Economy Since 1861: The New Evidence," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 1(1), pages 25-59, March.
    20. Buccola, Steven T., 1989. "Pricing Efficiency In Agricultural Markets: Issues, Methods, And Results," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 14(1), pages 1-11, July.

    More about this item

    Keywords

    Agribusiness; Demand and Price Analysis; Livestock Production/Industries;
    All these keywords.

    JEL classification:

    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:msaesp:305569. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/damtsus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.