Relationship Between Cattle Cash and Futures Markets
Date of Graduation
Fall 2005
Degree
Master of Natural and Applied Science in Agriculture
Department
College of Agriculture
Committee Chair
Arbindra Rimal
Abstract
Feeder cattle cash prices(FCC), live cattle cash prices(LCC) for Missouri, feeder cattle futures prices (FCF), live cattle futures prices (LCF), and corn futures prices (CF) were collected weekly for 260 weeks from January 1, 2000 through December 31, 2004 (n=260). The objective of this project was to determine if there continues to be strong relationship between the cash and futures markets for both live and feeder cattle despite recent changes in the beef industry. The study also evaluates the influence of cattle futures prices and corn futures prices; corn futures prices; and trend/structural change; and cattle futures prices, corn futures prices, and trend/structural change on cattle cash prices. Furthermore, this study looked at the effects of industry events such as Bovine Spongiform encephalopathy (BSE), Foot and Mouth Disease (FMD), and terrorist attacks on the relationship between cash and futures prices for both live and feeder cattle. Results indicate there remains a strong relationship between the cash and futures markets for live and feeder cattle. Data suggests that futures prices explain approximately 95% of the variability in the cash prices for both live and feeder cattle. When corn futures prices and trend variables (year) were added, the explanatory power of the model is enhanced slightly. Little variation was observed in cash-futures relationships during the times surrounding the outbreaks of BSE, FMD, and the terrorists attacks.
Keywords
feeder cattle prices, live cattle prices, livestock futures, risk management, cattle marketing
Subject Categories
Agriculture
Copyright
© Rachel Anne Postin
Recommended Citation
Postin, Rachel Anne, "Relationship Between Cattle Cash and Futures Markets" (2005). MSU Graduate Theses. 2345.
https://bearworks.missouristate.edu/theses/2345
Dissertation/Thesis