The Thinning Cash Cattle Market: Evaluating Sample Size, Policy Prescriptions, and Pricing Proxies
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Date
2022-08
Journal Title
Journal ISSN
Volume Title
Publisher
Cambridge University Press
Abstract
Many cattle producers and producer organizations are concerned that the live cattle negotiated market has become too thin. The percentage of live cattle procured through direct negotiations has declined below 20%, while the percentage procured through formulas has increased to more than 60%. Most formulas are based on directly 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 cash cattle procurement percentage requirements.
Description
Keywords
Cattle prices, mandatory price reporting, thin markets
Citation
Brester, G.W., K. Swanser, and B. Crosby (2022). “The Thinning Cash Cattle Market: Evaluating Sample Size, Policy Prescriptions, and Pricing Proxies.” Journal of Agricultural and Applied Economics 54, 531–547. https://doi.org/ 10.1017/aae.2022.24