Date of this Version
Cornhusker Economics, February 9, 2000, agecon.unl.edu/cornhuskereconomics
Attempts by agricultural economists to estimate the relationship between captive supplies and spot cattle prices span over thirty years. What we know is that the relationship is negative. That is, when captive supply usage goes up, spot cattle prices go down. What we don’t know is whether or not the negative relationship means that an increase in captive supply usage causes a decline in cattle prices, thus hurting independent cattle producers. Results of a recent investigative research report, using an extensive data set from the Texas Panhandle, suggests that the observed negative relationship should not be taken as causation.