U.S. Beef Industry: Cattle Cycles, Price Spreads, and Packer Concentration

Kenneth H. Mathews, Jr., William F. Hahn, Kenneth E. Nelson, Lawrence A. Duewer, and Ronald A. Gustafson

Technical Bulletin No. (TB1874) 52 pp, April 1999

In early 1996, the peak in the current cycle of cattle inventories coincided with a long list of negative factors--negative returns at the farm and feedlot, record-high feed grain prices, a severe drought in 1995-96, widening farm-retail price spreads, a low farmers' share of the consumers' Choice beef dollar, and reports of high profits for beefpackers. This confluence created an atmosphere in which some producers and members of Congress questioned whether the cattle industry was adversely affected by high packer concentration and market power. This report examines the cattle cycle of the 1990's to determine if there are differences from previous cattle cycles and, if so, how and why any differences occurred.

Keywords: Cattle cycles, price spreads, packer concentration, cattle slaughter, steer and heifer slaughter, cow slaughter

In this report ...

Chapters are in Adobe Acrobat PDF format.

• Frontmatter (Title Page, Table of Contents, Summary), 59 Kb
• Introduction, 47 Kb
• Characteristics of Cattle Cycles, 41 Kb
• Cattle Inventory Adjustments, 41 Kb
• Price Spreads, 78 Kb
• Beefpacker Concentration 55 Kb
• Comparing the 1990's With Past Cycles of Cattle Inventories, 114 Kb
• Price Spreads and the Cattle Cycle, 183 Kb
• Concentration Measures for the Beef Packing Industry, 113 Kb
• Conclusions;, 41 Kb
• References, 55 Kb
• Appendix table: Data Series for Cattle Cycle Analysis, 58 Kb
• Appendix: Our Asymmetric Model of Price Movements, 56 Kb

• Entire Report, 879 Kb

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Updated date: April 1, 1999