The cattle cycle

Wonyoung Choi

European Review of Agricultural Economics, 1977, vol. 4, issue 2, 119-136

Abstract: Summary The pig cycle, noted by Hanau in 1927, has been recognized and intensively studied since the formulation of the Cobweb Theorem by Ezekiel in 1938, but relatively little attention has been given to the existence of a cattle cycle. An examination of the period from 1954 to 1974 has revealed a seven-year cycle of surprising regularity in West German cattle production. A attempt has been made to determine the suitability of linear systems in providing an explanation of the behaviour of the cattle cycle. In the analysis, two systems have been distinguished, namely, the cattle market system and the production system. In the cattle market system the supply of slaughter cattle (the system input) is transformed into their price (the system output). The price of slaughter cattle is a current measure of the profitability of production and acts as a signal to producers to adjust their volume of output. The cattle production system defines the way in which this price signal (the input) is transformed into the production of cattle. In the functioning of the latter system, a. distinction is made between two types of time lag, namely, a lagged response of producers to price changes and a biologically determined delay in the response of production to producers'decisions. It is hoped that the analysis will provide a basic analytical framework for constructing a more elaborate and quantitative model which can be employed in forecasting and market regulation in this livestock sector.

Date: 1977
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