IDEAS home Printed from https://ideas.repec.org/p/ags/uerstb/33583.html
   My bibliography  Save this paper

U.S. Beef Industry: Cattle Cycles, Price Spreads, and Packer Concentration

Author

Listed:
  • Mathews, Kenneth H., Jr.
  • Hahn, William F.
  • Nelson, Kenneth E.
  • Duewer, Lawrence A.
  • Gustafson, Ronald A.

Abstract

In early 1996, the peak in the current cycle of cattle inventories coincided with a long list of negative factors--negative returns at the farm and feedlot, record-high feed grain prices, a severe drought in 1995-96, widening farm-retail price spreads, a low farmers' share of the consumers' Choice beef dollar, and reports of high profits for beefpackers. This confluence created an atmosphere in which some producers and members of Congress questioned whether the cattle industry was adversely affected by high packer concentration and market power. In this report, we examine the cattle cycle of the 1990's to determine if there are differences from previous cattle cycles and, if so, how and why they are different. We found that values for many variables at the 1996 cyclical peak in cattle inventories, while bad, were not the worst on record. Further, price levels during the cattle cycle of the 1990's were better, our models suggest, than they could have been, given earlier patterns of price adjustment. Finally, despite the growth of packer concentration, we failed to demonstrate large negative effects of packer concentration on cattle prices during the 1991-to-present cattle cycle.

Suggested Citation

  • Mathews, Kenneth H., Jr. & Hahn, William F. & Nelson, Kenneth E. & Duewer, Lawrence A. & Gustafson, Ronald A., 1999. "U.S. Beef Industry: Cattle Cycles, Price Spreads, and Packer Concentration," Technical Bulletins 33583, United States Department of Agriculture, Economic Research Service.
  • Handle: RePEc:ags:uerstb:33583
    as

    Download full text from publisher

    File URL: http://purl.umn.edu/33583
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Duewer, Lawrence A., 1969. "Effects of Specials on Composite Meat Prices," Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, issue 3.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Arunas Juska & Lourdes Gouveia & Jackie Gabriel & Kathleen Stanley, 2003. "Manufacturing bacteriological contamination outbreaks in industrialized meat production systems: The case of E. coli O157:H7," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 20(1), pages 3-19, March.
    2. Aadland, David, 2004. "Cattle cycles, heterogeneous expectations and the age distribution of capital," Journal of Economic Dynamics and Control, Elsevier, vol. 28(10), pages 1977-2002, September.
    3. David Aadland, "undated". "The economics of cattle supply," Working Papers 2000-11, Utah State University, Department of Economics.
    4. Leroux, Nicole & Wortman, Max S., Jr. & Mathias, Eric D., 2001. "Dominant Factors Impacting The Development Of Business-To-Business (B2b) E-Commerce In Agriculture," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 4(02).
    5. Griffith, G.R. & Alford, A.R., 2002. "The US Cattle Cycle and its Influence on the Australian Beef Industry," Australasian Agribusiness Review, University of Melbourne, Melbourne School of Land and Environment, vol. 10.
    6. Colette, W. Arden & Almas, Lal K. & Hittle, Chad A., 2003. "Utilizing Expected Revenue In Selecting Optimal Marketing Alternatives For Fixed Resource Cow/Calf Operators In The Texas Panhandle," 2003 Annual Meeting, February 1-5, 2003, Mobile, Alabama 35187, Southern Agricultural Economics Association.
    7. Sayed H. Saghaian, 2007. "Beef safety shocks and dynamics of vertical price adjustment: The case of BSE discovery in the U.S. beef sector," Agribusiness, John Wiley & Sons, Ltd., vol. 23(3), pages 333-348.
    8. Hunnicutt Lynn & Aadland David, 2003. "Inventory Constraints in a Dynamic Model of Imperfect Competition: An Application to Beef Packing," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 1(1), pages 1-24, March.
    9. Griffith, Garry & Alford, Andrew R., 2000. "Outlook for the Australian beef industry," 2000 Conference (44th), January 23-25, 2000, Sydney, Australia 171910, Australian Agricultural and Resource Economics Society.

    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:uerstb:33583. See general information about how to correct material in RePEc.

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

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.