IDEAS home Printed from https://ideas.repec.org/p/isu/genres/36023.html

Pass-Through in United States Beef Cattle Prices: A Test of Ricardian Rent Theory

Author

Listed:
  • Zhao, Huan
  • Xiaodong, Du
  • Hennessy, David A.

Abstract

Feeder cattle are fattened to become fed live cattle 6 months later, and the feeder cattle stock is fixed in the short-run. Efficiency in competitive markets suggests feeder cattle prices should fully reflect feed prices and information on future fed cattle prices. Employing a long time series (1979-€œ2004) of feeder cattle futures, live cattle futures, and local corn prices, we test whether complete pass-through occurs. For fed cattle futures prices, we find about 93% of complete pass-through to present feeder cattle prices. The corresponding negative effect of a corn price increase is about 87% of complete pass-through. In contrast with imperfectly competitive agricultural land rental markets, the results support the hypothesis of Ricardian rent extraction by the scarce asset owner in feeder cattle markets.

Suggested Citation

  • Zhao, Huan & Xiaodong, Du & Hennessy, David A., 2011. "Pass-Through in United States Beef Cattle Prices: A Test of Ricardian Rent Theory," Staff General Research Papers Archive 36023, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:36023
    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
    for a similarly titled item that would be available.

    Other versions of this item:

    Citations

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


    Cited by:

    1. Melissa G. S. McKendree & Glynn T. Tonsor & Zekuan Dong, 2024. "Price pass‐through in the U.S. beef industry: Implications of feedlot capacity utilization," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 72(3), pages 365-387, September.
    2. Ay, Jean-Sauveur & Latruffe, Laure, "undated". "The Empirical Content of the Present Value Model: A survey of the instrumental uses of farmland prices," Working papers 157112, Factor Markets, Centre for European Policy Studies.
    3. Jan SYRUCEK & Jindrich KVAPILIK & Ludek BARTON & Mojmir VACEK & Ludek STADNIK, 2017. "Economic efficiency of suckler cow herds in the Czech Republic," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 63(1), pages 34-43.
    4. Melissa G.S. McKendree & Tina L. Saitone & K. Aleks Schaefer, 2021. "Oligopsonistic Input Substitution in a Thin Market," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(4), pages 1414-1432, August.
    5. Thompson, Nathanael M. & Brorsen, B. Wade & DeVuyst, Eric A. & Lusk, Jayson L., 2016. "Random Sampling of Beef Cattle for Genetic Testing: Optimal Sample Size Determination," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 229195, Southern Agricultural Economics Association.
    6. McKendree, Melissa G. S. & Saitone, Tina L. & Schaefer, K Aleks, 2020. "Cattle Cycle Dynamics in a Modern Agricultural Market: Competition in Holstein Cattle Procurement," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304380, Agricultural and Applied Economics Association.
    7. No, Sung C. & Davis, Christopher G. & Harvey, David, 2015. "Pricing-to-Market and Exchange Rate Pass-Through in the U.S. Broiler Meat Export Markets," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 18(A), pages 1-12, July.
    8. 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.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

    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:isu:genres:36023. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Curtis Balmer (email available below). General contact details of provider: https://edirc.repec.org/data/deiasus.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.