Skip to main content Accessibility help
×
Home

Causal Relationships in the Fed Cattle Market

  • Thomas H. Spreen (a1) and J. Scott Shonkwiler (a1)

Extract

The production process of transforming a 600–700 pound feeder steer into a slaughter animal typically requires four to six months. Conceptually, there should exist some relationship between the prices of feeder calves and slaughter cattle prices. In one view, since the feeder calf constitutes the costliest input in the production of the slaughter animal, the prices of fed cattle should be temporally connected to the cost of the feeder animals. This view suggests that feeder calf prices should lead slaughter prices by the length of the production process (Trierweiler and Hassler). In another view, the price of feeder calves is determined by the interaction of the supply of and derived demand for feeder cattle by feedlot operators. It is presumed that the derived demand for feeder cattle is related to feedlot operators' expectations of future fed cattle prices. If their expectations are strongly influenced by current fed cattle prices, then a relationship is suggested whereby slaughter and feeder prices vary concomitantly.

Copyright

References

Hide All
Arzac, Enrique R. and Wilkinson, Maurice. “A Quarterly Econometric Model of United States Livestock and Feed Grain Markets and Some of its Policy Implications.Amer. J. Agr. Econ. 61(1979): 297308.
Barksdale, Hiram C.et al. “A Cross Spectral Analysis of Beef Prices.Amer. J. Agr. Eco. 47(1975): 309–15.
Bessler, David A. and Schrader, Lee F.Measuring Leads and Lags Among Prices: Turkey Products.Agr. Econ. Res. 32( 1980a): 17.
Bessler, David A. and Schrader, Lee F.Relationship Between Two Price Quotes for Eggs.Amer. J. Agr. Econ. 62(1980b):766–71.
Ehrich, R. L.Cash-Futures Price Relationships in Live Beef Cattle.Amer. J. Agr. Econ. 51(1969):2639.
Feige, Edgar L. and Pearce, Douglas K.The Casual Causal Relationship Between Money and Income: Some Caveats for Time Series Analysis.Rev. Econ. Stat. 61(1979):521–33.
Franzman, John R. and Walker, Rodney. “Trend Models of Feeder, Slaughter and Wholesale Beef Cattle Prices.Amer. J. Agr. Econ. 54(1972):507–12.
Granger, C. W. J.Investigating Causal Relations by Econometric Models and Cross Spectral Methods.Econometrica 37(1969):424–38.
Gustafson, Ronald A. and Arsdale, Roy Van. Cattle Feeding in the United States. Economic Research Service, U.S. Department of Agriculture, October 1979.
Haugh, Larry D.The Identification of Time Series Interrelationships with Special Reference to Dynamic Regression.” Ph.D. dissertation. University of Wisconsin-Madison, 1972.
Haugh, Larry D. and Box, G. E. P.Identification of Dynamic Regression (Distributed Lag) Models Connecting Two Time Series.J. Amer. Stat. Assoc. 72(1977): 121–30.
Miller, Stephen E.Univariate Residual Cross-Correlation Analysis: An Application to Beef Prices.” North Central J. Agr. Econ. July(1979): 141–46.
Pierce, David A.Relationships—and the Lack Thereof—Between Economic Time Series with Special Reference to Money and Interest Rates.J. Amer. Stat. Assoc. 72(1977): 1122.
Sims, Christopher A.Money, Income and Causality.” Amer. Econ. Rev. September(1972):540–52.
Sims, Christopher A.Comment.J. Amer. Stat. Assoc. 72(1977): 23, 24.
Trierweiler, John E. and Hassler, James. “Measuring Efficiency in the Beef-Pork Sector by Price Analysis.Agr. Econ. Res. 23(1971): 1118.

Causal Relationships in the Fed Cattle Market

  • Thomas H. Spreen (a1) and J. Scott Shonkwiler (a1)

Metrics

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed