Impact of Mandatory Price Reporting on Fed Cattle Market Integration

Geographic fed cattle markets are important because cattle are bulky and perishable, and production and consumption areas are separated. These characteristics make cattle transportation costly and can contribute to segmented markets. This study uses USDA-AMS reported fed cattle market price data from five U.S. regional fed cattle markets to investigate the effects of mandatory price reporting on spatial market integration. Results indicate these markets have been, and remain, highly cointegrated after implementation of mandatory price reporting (MPR). Following introduction of mandatory price reporting, the five regional fed cattle markets have become more fully integrated (i.e., prices tend to move more closely one-for-one following introduction of MPR).cattle markets, cointegration, mandatory price reporting, market integration, regime shift, Livestock Production/Industries, Marketing,

SPATIAL MARKET INTEGRATION IN REGIONAL CATTLE MARKETS

Geographic markets are extremely important to agriculture because agricultural products are bulky and/or perishable and production and consumption areas are separated. This study investigates how mandatory price reporting has influenced the degree of spatial market integration between U.S. regional fed cattle markets. Results indicate the market prices across the regional cattle markets are cointegrated. In addition, the amount of time it took for one market to react to the other markets change in price varied across the three time periods used in this study. This suggests mandatory price reporting has not substantially increased market integration.Industrial Organization,

EFFECT OF CAPTIVE SUPPLY ON FARM-TO-WHOLESALE BEEF MARKETING MARGIN

Debates about captive supplies have been ongoing for more than a decade. This study investigates the effects captive supplies have on the beef farm-to-wholesale marketing margin. A relative price spread (RPS) model is used to estimate beef farm-to-wholesale marketing margins. Estimates indicate that forward contracts and marketing agreements have a small positive relationship with margins that is marginally significant. Packer fed cattle may or may not be related to margins to depending upon model specification.Livestock Production/Industries, Marketing,

Lessons from the Canadian Cattle Industry for Developing the National Animal Identification System

The primary focus of animal identification programs, which are rapidly developing throughout the world, is to effectively respond to animal health emergencies that have the potential to cause devastating consequences to animal and public health. Additional benefits of an animal identification program include maintaining or expanding international trade, increased consumer confidence, and improved supply chain management. The primary objective of this paper is to provide a series of recommendations for the U.S. to consider as it continues to develop the National Animal Identification System. The secondary objective is to explain how some progressive operations, spanning all sectors of the live cattle and beef industry supply chain complex in Canada, have utilized the technology of the mandatory cattle identification program to improve management intensity.Animal Identification, Canadian Cattle Identification Agency, National Animal Identification System, Research and Development/Tech Change/Emerging Technologies, Q10, Q16,

THE ECONOMIC IMPACTS OF A FOOT-AND-MOUTH DISEASE OUTBREAK: A REGIONAL ANALYSIS

Contagious animal diseases like foot-and-mouth disease (FMD) are often referred to as economic diseases because of the magnitude of economic harm they can cause to producers and to local communities. This study demonstrates the local economic impact of a hypothetical FMD outbreak in southwest Kansas, an area with high density of cattle feeding. The expected (most probable) economic impact of the disease hinges heavily on where the incidence of the disease occurs. If the disease were to occur in a cow-calf herd in the region economic impact is expected to be relatively small compared to if it were introduced simultaneously in five large feedlots in southwest Kansas. Disease surveillance, management strategies, mitigation investment, and overall diligence clearly need to be much greater in concentrated cattle feeding and processing areas at the large feeding operations in the region.Livestock Production/Industries,

A Risk Analysis of Carbon Sequestration in Claypan Soil with Conservation Tillage Systems and Nitrogen Fertilizers for Grain Sorghum and Soybean

Replaced with revised version of paper 02/15/06.carbon sequestration, carbon credits, nitrogen, risk, tillage, Crop Production/Industries, Risk and Uncertainty, Q12,

A Risk Analysis of Converting CRP Acres to a Wheat-Sorghum-Fallow Rotation

This study examines the economic potential of producing a wheat (Triticum aesitivum) and grain sorghum (Sorghum bicolor (L.) Moench) rotation with three different tillage strategies compared to the Conservation Reserve Program (CRP) in a semi-arid region. This research uses stochastic efficiency with respect to a function (SERF) to determine the preferred management strategies under various risk preferences and utility-weighted certainty equivalent risk premiums. Yields, input rates, and field operations from an experimental field in western Kansas are used to calculate net returns for each tillage strategy. Although current net returns to crop production using reduced tillage and no-tillage strategies are higher than CRP, risk analysis indicates CRP would be the preferred strategy for some risk-averse managers.Conservation Reserve Program, conservation tillage, simulation, sorghum, wheat, risk, Agricultural and Food Policy, Crop Production/Industries, Farm Management, Land Economics/Use, Risk and Uncertainty,

AN ECONOMIC AND RISK ANALYSIS OF THE EFFECTS OF TILLAGE AND NITROGEN SOURCE ON SOIL CARBON SEQUESTRATION IN CORN PRODUCTION

The economic potential of no-tillage versus conventional tillage to sequester soil carbon using either commercial nitrogen or manure for continuous corn production is evaluated. Results indicate which system provides the highest net returns, which system is preferred by risk averse decision makers, and the price of carbon credits under alternative risk aversion preferences.Risk and Uncertainty,

MATHEMATICAL FORMULAS FOR CALCULATING NET RETURNS FROM PARTICIPATION IN GOVERNMENT PROGRAMS, CRP, AND CROP INSURANCE ALTERNATIVES

The purpose of this report is to provide a revised version of the publication, "Mathematical Formulas for Calculating Net Returns from Participation in Government Commodity Programs including Marketing Loans" (Williams and Barnaby, 1994). The change in design of the government commodity programs and development of several crop insurance alternatives has been significant since the previous paper was published. The formulas for calculating net returns incorporate provisions from the Farm Security and Rural Investment Act of 2002 and several crop insurance designs developed in the 1990s. Individuals conducting research or education programs will be able to use this revision for reference when estimating net returns for producers under current commodity program and crop insurance plan provisions.Agricultural Finance,

Value of Arrival Metaphylaxis in U.S. Cattle Industry

Although several studies have estimated economic impacts of antimicrobials for growth promotion, little is known about economic impacts of the common animal health management strategy known as metaphylaxis: administering antimicrobials to groups of animals to prevent disease. This article develops a new framework to map animal disease to producer profitability and determine societal economic impacts surrounding metaphylactic use of antimicrobials in beef cattle production. Results indicate the direct net return value of metaphylaxis to the U.S. fed cattle industry is at least $532 million. Beef producer surplus losses of$1.8 billion would be associated with eliminating metaphylaxis