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Trade-Related Policy and Canadian-U.S. Fed Cattle Transactions Basis

Author

Listed:
  • Schulz, Lee L.
  • Schroeder, Ted C.
  • Ward, Clement E.

Abstract

Price differences among fed cattle prices in Canada and the United States (referred to here as fed cattle basis) are important for Canadian cattle feeders, but changing government regulations in Canada and the United States have made basis more variable. This article uses transaction data from Canadian feedlots to quantify fed cattle price differentials in light of new policy initiatives. Using transaction prices, we find that differing slaughter regulations, labeling laws, and policies affecting access to U.S. markets for Canadian cattle affect fed cattle basis.

Suggested Citation

  • Schulz, Lee L. & Schroeder, Ted C. & Ward, Clement E., 2011. "Trade-Related Policy and Canadian-U.S. Fed Cattle Transactions Basis," Staff General Research Papers Archive 35143, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:35143
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    File URL: http://www2.econ.iastate.edu/papers/p15143-2011-08-01.pdf
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    References listed on IDEAS

    as
    1. Wu, De-Min, 1973. "Alternative Tests of Independence Between Stochastic Regressors and Disturbances," Econometrica, Econometric Society, vol. 41(4), pages 733-750, July.
    2. Ward, Clement E. & Schroeder, Ted C., 2007. "Price Discovery and Captive Supply Implications for the Canadian Beef Industry," CAFRI: Current Agriculture, Food and Resource Issues, Canadian Agricultural Economics Society, issue 08.
    3. Muth, Mary K. & Liu, Yanyan & Koontz, Stephen R. & Lawrence, John D., 2008. "Differences in Prices and Price Risk Across Alternative Marketing Arrangements Used in the Fed Cattle Industry," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 33(01), April.
    4. DeeVon Bailey & B. Wade Brorsen & Chris Fawson, 1993. "Buyer Concentration at Feeder Cattle Auctions," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 15(1), pages 103-119.
    5. John R. Schroeter & Azzeddine Azzam, 2003. "Captive supplies and the spot market price of fed cattle: The plant-level relationship," Agribusiness, John Wiley & Sons, Ltd., vol. 19(4), pages 489-504.
    6. Schroeder, Ted C., 1997. "Fed Cattle Spatial Transactions Price Relationships," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 29(02), pages 347-362, December.
    7. Ward, Clement E. & Carlberg, Jared G. & Brocklebank, Andrea, 2007. "Comparing Canadian and U.S. Cattle Feeding Pricing Practices and Perceptions of Pricing Issues," CAFRI: Current Agriculture, Food and Resource Issues, Canadian Agricultural Economics Society, issue 08.
    8. Jones, Rodney & Schroeder, Ted & Mintert, James & Brazle, Frank, 1992. "The Impacts of Quality on Cash Fed Cattle Prices," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 24(02), pages 149-162, December.
    9. Feuz, Dillon M. & Harris, Chad & Bailey, DeeVon & Halverson, Gary, 2008. "Transportation and Quality Adjusted Basis: Does the Law of One Price Hold for Feeder Cattle?," 2008 Annual Meeting, June 23-24, 2008, Big Sky, Montana 42311, Western Agricultural Economics Association.
    10. Ward, Clement E. & Koontz, Stephen R. & Schroeder, Ted C., 1998. "Impacts From Captive Supplies On Fed Cattle Transaction Prices," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 23(02), December.
    11. Ward, Clement E., 1981. "Short-Period Pricing Models For Fed Cattle And Impacts Of Wholesale Carcass Beef And Live Cattle Futures Market Prices," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 13(01), July.
    12. Ted C. Schroeder & Rodney Jones & James Mintert & Andrew P. Barkley, 1993. "The Impact of Forward Contracting on Fed Cattle Transaction Prices," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 15(2), pages 325-337.
    13. Ward, Clement E., 1981. "Short-Period Pricing Models for Fed Cattle and Impacts of Wholesale Carcass Beef and Live Cattle Futures Market Prices," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 13(01), pages 125-132, July.
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    Cited by:

    1. Pouliot, Sebastien & Sumner, Daniel A., 2014. "Differential impacts of country of origin labeling: COOL econometric evidence from cattle markets," Food Policy, Elsevier, vol. 49(P1), pages 107-116.
    2. Edgar E. Twine & James Rude & Jim Unterschultz, 2016. "Country of Origin Labeling and Structural Change in U.S. Imports of Canadian Cattle and Beef," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 64(3), pages 545-563, September.
    3. Taylor, Mykel R. & Tonsor, Glynn T., 2013. "Revealed Demand for Country-of-Origin Labeling of Meat in the United States," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 38(2), August.

    More about this item

    Keywords

    basis; Canada; cattle prices; government policy; international trade; market access; transaction prices;

    JEL classification:

    • 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
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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