John M. Marsh

Impacts of Declining U.S. Retail Beef Demand on Farm-Level Beef Prices and Production

A systems model was estimated to determine the effects of declining U.S. retail beef demand on farm-level beef prices and production. Retail beef demand declined by nearly 66% from 1976 to 1999. Results indicate autonomous shifts in retail demand significantly impacted farm-level demands and production. Based on equilibrium multipliers, the 1976–99 reduction in beef demand decreased real slaughter cattle prices and production by 32.1% and 11.2%, respectively. Real feeder cattle prices and production decreased by 8.0% and 22.6%, respectively. Combining the decreases in farm prices and production, slaughter and feeder cattle producers experienced a real revenue reduction of

Estimating Intertemporal Supply Response in the Fed Beef Market

13.3 billion (61%) due to the long-term decline in demand. Copyright 2003, Oxford University Press.

Monthly Price Premiums and Discounts between Steer Calves and Yearlings

A partial adjustment model with monthly lag structures on expected output and input prices is used to estimate intertemporal supply behavior of fed beef. Previous research has provided conflicting supply elasticities. The present work reconciles the conflicts by integrating different lengths of run into cattle marketing and placement decisions. For example, the model dynamics incorporate short-run changes in cattle asset values and long-run adjustments in resource use. Empirical results provide no evidence of short-run supply fixity; supply elasticities switch from negative to positive over time.

The Effects of Breeding Stock Productivity on the U.S. Beef Cattle Cycle

Distributed lags are used to estimate monthly prices and price premiums and discounts between steer calves and steer yearlings. The statistical results show that premiums and discounts are not highly seasonal but are affected by expected changes in fed slaughter prices and cost of gain in the feedlot. The effects of these variables are sensitive to time, thus the latter should be taken into account for future marketing decisions. Also, price flexibility coefficients indicate that profitability risk in cattle finishing is shifted more to price-weight differences of cattle placed on feed than to changes in the individual prices themselves.

A Rational Distributed Lag Model of Quarterly Live Cattle Prices

The effects of breeding stock productivity on the U.S. beef cattle cycle were econometrically estimated. Growth in output per beef cow was hypothesized to impact inventory response via cattle prices and marketing alternatives. Beef productivity included carcass weights of steers, heifers, and cull cows but excluded carcass weights of dairy cattle and cattle imports. Results indicate that from ten years to an equilibrium period, the beef cow herd averaged 0.5% to 2.5% smaller compared to if zero productivity growth had occurred. In addition, productivity growth decreased the inventory elasticity of supply by 18% between 1960–74 and 1975–96. Copyright 1999, Oxford University Press.

JAPANESE IMPORT DEMAND FOR U.S. BEEF AND PORK: EFFECTS ON U.S. RED MEAT EXPORTS AND LIVESTOCK PRICES

Quarterly U.S. feeder cattle and fed cattle prices were estimated within a rational distributed lag framework, utilizing nonstochastic difference equations to minimize problems with specification errors in the disturbance structure. The behavior of certain input and output variables in the beef market explained the price variation in each reduced form equation. The results revealed dynamic stability, with a geometric rational lag structure describing fed cattle prices and a polynomial rational lag structure characterizing feeder cattle prices. These dynamics were found to be better than both static-serial correlation and purely autoregressive specifications.

Integration and Interdependence in the U.S. and Canadian Live Cattle and Beef Sectors

Japanese import demand for U.S. beef and pork products and the effects on domestic livestock prices are econometrically estimated. Japan is the most important export market for U.S. beef and pork products. Results indicate foreign income, exchange rates, and protectionist measures are statistically significant. The comparative statistics quantify the effects of recent economic volatility. For example, the 1995-1998 depreciation in the Japanese yen (39%) reduced U.S. slaughter steer and hog prices by

Exchange rate pass-through, price discrimination, and US meat export prices

1.29 per cwt and

The Effects of the Dairy Termination Program on Live Cattle and Wholesale Beef Prices

0.99 per cwt, respectively, while the 1994-1998 reduction in tariffs (14%) increased slaughter steer and hog prices by

International red meat trade

0.49 per cwt and