Adding Weight to a Thinning Live Cattle Market

Gary W. Brester, Kole Swanser and Brett Crosby

No 305569, MSU Staff Papers from Montana State University > Department of Agricultural Economics and Economics

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

Keywords: Agribusiness; Demand and Price Analysis; Livestock Production/Industries (search for similar items in EconPapers)
Pages: 22
Date: 2020-09-30
New Economics Papers: this item is included in nep-agr
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Persistent link: https://EconPapers.repec.org/RePEc:ags:msaesp:305569

DOI: 10.22004/ag.econ.305569

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