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Causality Between Captive Supplies and Cash Market Prices in the U.S. Cattle Procurement Market

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  • Ji, In Bae
  • Chung, Chanjin

Abstract

This study tests the causal direction between captive supply and cash market price in the U.S. cattle procurement market. Finding the correct causality should provide useful information to the decades-long debate on packers’ anti-competitive behavior in the U.S. cattle procurement market. It should also help researchers find better econometric specifications for the cash price-captive supply relationship. Two causality tests—-the Granger test and the Modified Wald test—-were conducted. Overall test results indicate that captive supply causes cash market price, and it favors the price-dependent model.

Suggested Citation

  • Ji, In Bae & Chung, Chanjin, 2012. "Causality Between Captive Supplies and Cash Market Prices in the U.S. Cattle Procurement Market," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 41(3), pages 1-11, December.
    • Handle: RePEc:ags:arerjl:142114
    DOI: 10.22004/ag.econ.142114
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. Brorsen B. Wade & Fain James R. & Maples Joshua G., 2018. "Alternative Policy Responses to Increased Use of Formula Pricing," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 16(1), pages 1-11, January.

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