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Price Discovery in Nebraska Cattle Markets

Published online by Cambridge University Press:  26 January 2015

Mathew C. Stockton ,
David A. Bessler  and
Roger K. Wilson
Mathew C. Stockton
Affiliation:
West Central Research and Extension Center, University of Nebraska-Lincoln, North Platte, NE
David A. Bessler
Affiliation:
Department of Agricultural Economics, Texas A&M University
Roger K. Wilson
Affiliation:
Department of Agricultural Economics, University of Nebraska-Lincoln
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Abstract

Monthly observations on prices from 10 weight/gender classifications of Nebraska beef cattle are studied in an error correction model (ECM) framework. This study attempts a replication of the 2003 paper on Texas prices by Bessler and Davis, where they find medium heifers (600-700 1b) at the center of price discovery. Using the ECM results Nebraska light steers are found to be weakly exogenous, with the innovation accounting results showing marked differences. Industry structure, production choices, and animal type and breeding herd differences between Texas and Nebraska are proposed as plausible reasons for partial (or incomplete) success at replication.

Keywords

Bernanke factorizationcattle pricescointegrationdirected acyclical graphserror correctionPC algorithmprice discoveryC49Q13
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 42 , Issue 1 , February 2010 , pp. 1 - 14
Copyright
Copyright © Southern Agricultural Economics Association 2010

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