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Public Price Reporting in the Cash Market for Live Cattle: A Spatial Market Approach

Published online by Cambridge University Press:  15 September 2016

Scott W. Fausti ,
Matthew A. Diersen  and
Bashir A. Qasmi
Scott W. Fausti
Affiliation:
Department of Economics at South Dakota State University in Brookings
Matthew A. Diersen
Affiliation:
Department of Economics at South Dakota State University in Brookings
Bashir A. Qasmi
Affiliation:
Department of Economics at South Dakota State University in Brookings
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Abstract

Legislative authorization for the Livestock Mandatory Reporting Act of 1999 was renewed in October of 2006. One of the cited justifications for implementing mandatory reporting was that the voluntary reporting system for the slaughter cattle cash market was unable to provide accurate and timely market information. We extend the spatial market analysis literature by developing a methodology for detecting distortions in spatial relationships across related price series. Using spatially linked regional markets, we compare state-level mandatory price-reporting data to the U.S. Department of Agriculture voluntarily reported state data to determine if the spatial relationship between price-reporting mechanisms was disrupted by market distortions prior to implementation of federal mandatory price reporting. We found no empirical evidence of system failure; therefore, we conclude that market thinning or noncompetitive behavior had not reached the level necessary to disrupt the ability of the voluntary price-reporting system to provide timely and accurate price information.

Keywords

public price reportingspatial marketsmarket integrationprice transparencyprice discoverylivestock markets
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 36 , Issue 2 , October 2007 , pp. 336 - 348
Copyright
Copyright © 2007 Northeastern Agricultural and Resource Economics Association 

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