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Adding Weight to a Thinning Live Cattle Market

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  • Brester, Gary W.
  • Swanser, Kole
  • Crosby, Brett

Abstract

ADDING WEIGHT TO A THINNING LIVE CATTLE MARKET Abstract Many segments of the beef cattle industry have raised concerns that the live cattle negotiated market has become so thin that it no longer reflects underlying beef supply and demand fundamentals. The percentage of live cattle procured through negotiations has declined to about 15% while the percentage procured through formulas has increased to almost 70%. Proposed legislation mandating that a larger percentage of live cattle be procured through negotiations represent a market intervention. We show that live cattle futures market prices could be used as a base in formulas and would be less restrictive in meeting specific cattle procurement percentages. Key Words: cattle prices, mandatory price reporting, thin markets JEL Codes: Q11, Q13, Q18

Suggested Citation

  • Brester, Gary W. & Swanser, Kole & Crosby, Brett, 2020. "Adding Weight to a Thinning Live Cattle Market," MSU Staff Papers 305569, Montana State University > Department of Agricultural Economics and Economics.
    • Handle: RePEc:ags:msaesp:305569
    DOI: 10.22004/ag.econ.305569
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Agribusiness; Demand and Price Analysis; Livestock Production/Industries;
    All these keywords.

    JEL classification:

    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • 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; Animal Welfare Policy

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