Short-Run Captive Supply Relationships with Fed Cattle Transaction Prices

Clement E. Ward and Stephen R. Koontz

No 285663, 1981-1999 Conference Archive from NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management

Abstract: Questions have been raised about the impacts on spot market prices from meatpackers purchasing fed cattle two or more weeks in advance of slaughter. Three base models were estimated to study: (1) the relationship between use of captive supplies and fed cattle transaction prices; (2) the impact on fed cattle transaction prices from buyers having an inventory of fed cattle procured by captive supply methods from which to deliver cattle for slaughter; and (3) price differences between cash transaction prices and prices for fed cattle purchased under different captive supply methods. There was some evidence that impacts from either delivering cattle from an inventory of captive supplies or having an inventory of captive supply cattle were negative to small. Forward contract prices were found to be significantly lower than cash fed cattle prices.

Keywords: Marketing (search for similar items in EconPapers)
Date: 1996-04
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Persistent link: https://EconPapers.repec.org/RePEc:ags:nc8191:285663

DOI: 10.22004/ag.econ.285663

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