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Are cattle on feed report revisions random and does industry anticipate them?

Author

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  • Jeffrey B. Mills

    (617 E. Main, PO Box 198, Council Grove, Kansas 66846., E-mail: cgkfma@cablerocket.com)

  • Ted C. Schroeder

    (Department of Agricultural Economics, Kansas State University, 342 Waters Hall, Manhattan, Kansas 66506-4011. E-mail: tcs@ksu.edu)

Abstract

Cattle on Feed (COF) reports are the most important source of cattle supply information for the beef industry. Accuracy of these reports is critical, as they have marked impacts on current and expected fed cattle market prices and influence resource allocation decisions. This study investigates whether COF report revisions are unbiased, random, and anticipated by beef industry analysts. Initial COF reports are biased, but the bias is economically small. Thus, there is no evidence that users of these reports should be concerned about bias. Revisions to COF estimates are not random and exhibit persistence, suggesting when revisions are made subsequent similar types of revisions tend to follow. However, on average, market analysts do not correctly anticipate revisions. Thus, if analysts' prerelease estimates are different from the initial COF report, this does not signal any useful information about future probable COF revisions. [EconLit citations: Q130, D840.] © 2004 Wiley Periodicals, Inc. Agribusiness 20: 363-374, 2004.

Suggested Citation

  • Jeffrey B. Mills & Ted C. Schroeder, 2004. "Are cattle on feed report revisions random and does industry anticipate them?," Agribusiness, John Wiley & Sons, Ltd., vol. 20(3), pages 363-374.
    • Handle: RePEc:wly:agribz:v:20:y:2004:i:3:p:363-374
    DOI: 10.1002/agr.20013
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    References listed on IDEAS

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    1. Schaefer, Matthew P. & Myers, Robert J., 1999. "Forecasting Accuracy, Rational Expectations And Market Efficiency In The Us Beef Cattle Industry," 1999 Annual meeting, August 8-11, Nashville, TN 21487, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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    1. Isengildina, Olga & Irwin, Scott H. & Good, Darrel L., 2004. "Does The Market Anticipate Smoothing In Usda Crop Production Forecasts?," 2004 Annual meeting, August 1-4, Denver, CO 20145, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Frank, Julieta & Garcia, Philip & Irwin, Scott H., 2008. "To What Surprises Do Hog Futures Markets Respond?," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 40(1), pages 73-87, April.
    3. Olga Isengildina-Massa & Berna Karali & Scott H Irwin, 2017. "Do Markets Correct for Smoothing in USDA Crop Production Forecasts? Evidence from Private Analysts and Futures Prices," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 39(4), pages 559-583.

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