Adding Weight to a Thinning Live Cattle Market

Gary W. Brester, Kole Swanser and Brett Crosby

No 310364, MSU Staff Papers from Montana State University > Department of Agricultural Economics and Economics

Abstract: Many segments of the beef cattle industry have raised concerns that the live cattle negotiated market has become too thin. The percentage of live cattle procured through direct negotiations has declined to about 15%, while the percentage procured through formulas has increased to almost 70%. Most of these formulas are based on negotiated cattle prices. Proposed legislation mandating that a larger percentage of live cattle be procured through negotiations represents a market intervention. We show that live cattle futures prices are good proxies for negotiated cash prices, while being less restrictive for meeting proposed cattle procurement percentage requirements.

Keywords: Agribusiness; Livestock Production/Industries (search for similar items in EconPapers)
Pages: 31
Date: 2021-02-26
New Economics Papers: this item is included in nep-agr
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Persistent link: https://EconPapers.repec.org/RePEc:ags:msaesp:310364

DOI: 10.22004/ag.econ.310364

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