Cycles in cattle and hog prices in South America

Fliessbach, Astrid; Ihle, Rico

doi:10.1111/1467-8489.12392

Cited by 11 publications

(11 citation statements)

References 24 publications

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“…However, these previous findings did not agree with those of this analysis as they were based on qualitative not quantitative statistical analysis. Another study that was conducted using data from three different countries in South America that include Brazil Chile, and Uruguay indicated that the cattle price cycle was about seven years, which falls within the same range of the identified cycle in this study [43]. The obtained cycles are in agreement with the biological aspects of beef cattle production system as the cow-calf production systems can experience long production time lags [44], due to the fact of the nine months of gestation and another six to nine months are needed until calves are ready to be sold.…”

Section: Production and Drought Cyclessupporting

confidence: 76%

Beef Cattle Price and Production Patterns in Relation to Drought in New Mexico

et al. 2021

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Understanding the fluctuations in monthly and annual cattle prices plays a key role in supporting the sustainability of New Mexico’s (NM’s), United States (US), beef cattle industry under variable environmental conditions. The goal of this study was to provide an improved understanding of NM’s beef cattle production systems in terms of prices and production patterns and related drought impacts. The main objectives were to evaluate monthly and annual prices patterns for heifers and steers (cattle) and calves, the relationships between annual cattle prices and inventory and drought, and the effects of drought on ranch net return. Drought events were assessed using the Self-Calibrated Palmer Drought Severity Index (9SC-PDSI). The generalized autoregressive conditional heteroscedasticity models and their exponential version were used to investigate the effects of drought and cattle supply on cattle prices, and the effects of drought on ranch net return. Spectral analysis and timeseries decomposition were used to identify the cycles of the annual price and numbers of cattle and calf. Coherence analysis was used to examine the relationships between inventory of cattle classes and drought. The results indicated that prices of cattle and calf usually drop in October through January and peak in April. The inventory of replacement heifers and steers were negatively related to cattle prices, while the inventory of calves was positively related to calf prices. Cattle and calf prices showed negative linear relationships with droughts. Annual cattle and calf prices showed 6- and 10-year cycles, while their inventory showed 6- and 8- year cycles, respectively. Our finding suggested that a rancher can still earn some net return when drought falls within the “Abnormally Dry” category of the US Drought Monitor. However, a rancher with a large herd or ranch size can endure drought more than a rancher with a medium herd or ranch size and reach the breakeven point. Specifically, the net return ($/head) is expected to increase (or decrease) by $62.29, $60.51, and $64.07 per head if the SC-PDSI increase (or decrease) by one unit in all large and medium ranch sizes, respectively. The effects of drought on ranch net return that we identified need further improvements using additional data. Due to NM’s location and the diversity of its rangeland, understanding the response of cattle prices to drought and beef cattle supply based on these findings can be used to help NM’s ranchers and those in other similar regions make informed ranch management decisions. These findings can also support the development of improved understanding of beef cattle production systems regionally.

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Section: Production and Drought Cyclessupporting

confidence: 76%

Beef Cattle Price and Production Patterns in Relation to Drought in New Mexico

et al. 2021

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“…This influences the smaller number of animals for replacement and finishing, being noticed after two or three years with the increase in prices. Given the increase in prices, cattle raisers tend to retain matrices for the production of calves with a long-term supply of fattened cattle, thus restarting a new livestock cycle [20].…”

Section: Price Behaviormentioning

confidence: 99%

Production and Price Cycles in Beef Cattle in Rondônia State, Brazilian Amazon

Santos

Costa²,

Santos³

et al. 2022

JEMT

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The study evaluates the behavior of production and prices in the beef cattle market in Rondônia, Brazilian Amazon. Covering the period from 1995 to 2020, we used statistical analysis based on the classical multiplicative method of time series. Resultingly, we found that the occurrence of annual seasonality in prices, with a reduction in the first half of the year and an increase in the second half of the year, corresponding to the bovine and off-season harvests, respectively. It was possible to observe the existence of three complete livestock cycles, with an average duration of five years. Trend, seasonality, and cycles of livestock in Rondônia, over the last 25 years, expose a series of relevant information for decision-making by agents in the livestock production chain, in addition to contributing to the understanding of the dynamics of this important agricultural market for Rondônia and Brazilian economy.

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“…The applications of unobserved-component models provide useful descriptions of price cycles. But, as noted in Fliessbach and Ihle (2020), the resulting statistical decompositions are not based on theoretical models of agricultural price fluctuations and hence cannot be construed as conclusive evidence of endogenous dynamics.…”

Section: Introductionmentioning

confidence: 98%

“…The co‐existence of high and low frequency cycles in commodity prices is well‐documented (Rossen, 2015). Following Fliessbach and Ihle (2020), we utilized unobserved‐component models to describe the main features of cycles in chick and broiler prices. We estimated different random‐walk and local‐level specifications with trend, drift, and seasonality components.…”

Section: Introductionmentioning

confidence: 99%

Endogenous price fluctuations: Evidence from the chicken supply chain in Pakistan

Chaudhry

Miranda

2023

American J Agri Economics

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Persistent agricultural price fluctuations in developing countries have revived interest in the theory of endogenous price instability. We examine the underlying cause of price instability in Pakistan's broiler and chick markets. To this end, we utilize findings from our fieldwork and estimates from unobserved component‐models to formulate a theoretical model of endogenous price fluctuations in the chicken supply chain of Pakistan. Under standard assumptions, we derive hypotheses from our theoretical model that can be tested by using vector autoregressions and weekly data on broiler and chick (farm‐gate) prices in Pakistan. Our empirical estimates conform to the predictions of our theoretical model, and evidence of endogenous dynamics in observed prices is robust to alternative specifications and estimation methods. We use numerical simulations to illustrate that empirically grounded parameterizations of our theoretical model can emulate the salient features of broiler and chick price fluctuations in Pakistan. The accumulation of evidence from our descriptive, empirical, and numerical analysis builds a compelling case for the endogenous nature of price instability in Pakistan's chicken supply chain.

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Cycles in cattle and hog prices in South America

Cited by 11 publications

References 24 publications

Beef Cattle Price and Production Patterns in Relation to Drought in New Mexico

Beef Cattle Price and Production Patterns in Relation to Drought in New Mexico

Production and Price Cycles in Beef Cattle in Rondônia State, Brazilian Amazon

Endogenous price fluctuations: Evidence from the chicken supply chain in Pakistan

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