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The Impact of Cattle Hide and Byproduct Values on Cattle Price Declines in 2020

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Listed:
  • Gary W. Brester
  • Kole Swanser

Abstract

Several published studies indicate that cattle hide values and edible and inedible cattle slaughtering byproducts influence cattle prices. Most cattle processing byproducts are exported. The worldwide COVID-19 pandemic interrupted many international trade supply chains and fed cattle futures prices declined from $127.43/cwt in January 2020 to $83.83/cwt at the end of April 2020. Much of this decline was the result of uncertainties in supply chains, reductions in the demand for beef by the HRI sector, and disruptions in international trade. In addition, lower hide and edible/inedible byproduct values also contributed to lower cattle prices. We show that 0.6% (or $0.54/cwt) of the reduction in cattle prices was associated with lower non-hide byproduct values. A larger reduction (6.5% or $6.30/cwt) was associated with a 50.3% decline in hide values.

Suggested Citation

  • Gary W. Brester & Kole Swanser, 2021. "The Impact of Cattle Hide and Byproduct Values on Cattle Price Declines in 2020," MSU Staff Papers 309621, Montana State University > Department of Agricultural Economics and Economics.
    • Handle: RePEc:ags:msaesp:309621
    DOI: 10.22004/ag.econ.309621
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    File URL: https://ageconsearch.umn.edu/record/309621/files/Hide_StaffPaperFinal.pdf
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    References listed on IDEAS

    as
    1. Brester, Gary W. & Marsh, John M., 2001. "The Effects Of U.S. Meat Packing And Livestock Production Technologies On Marketing Margins And Prices," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(2), pages 1-18, December.
    2. Marsh, John M. & Brester, Gary W., 2004. "Wholesale-Retail Marketing Margin Behavior in the Beef and Pork Industries," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(1), pages 1-20, April.
    3. Melissa G. S. McKendree & Glynn T. Tonsor & Ted C. Schroeder & Nathan P. Hendricks, 2020. "Impacts of Retail and Export Demand on United States Cattle Producers," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(3), pages 866-883, May.
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    Keywords

    Agribusiness; Demand and Price Analysis; Livestock Production/Industries; Risk and Uncertainty;
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