A Study of Canadian Cattle Prices and Price Spreads

Download or read book A Study of Canadian Cattle Prices and Price Spreads written by Murray Hector Hawkins and published by . This book was released on 1964 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The importance of the retail and wholesale beef price spreads has long been neglected in the field of Agricultural Economics. The concept of cattle prices and beef price spreads being highly related has only recently been explored. This study was an attempt to test the hypothesis that the farm-retail spread was important in explaining variations in cattle prices. Despite the weaknesses of the available data, stepwise regressions and correlation techniques were used to examine hypothetical relationships existing in the livestock and meat industry. Special attention was given to the relationships existing between livestock receipts, cattle prices and the Canadian cattle slaughter. A brief encounter with the theory of countervailing power is left to the last chapter in the thesis. Further study into current applications of the original concept, as outlined by J. K. Galbraith, is warranted in view of changing power relations in the meat industry. Many interesting and unusual relationships were found. Attention might be focussed on the declining wholesale spread, however, more attention should be given to the ever widening retail spread. The failure of the Canadian cattle slaughter to explain any significant portion of the variation in cattle prices should be further investigated. From the many correlations calculated there emerged a glimpse of an important variable in the livestock industry. Cattle receipts on the Toronto market appeared to be a vital factor in determining the width of the wholesale and retail beef price spreads on the markets studied. Furthermore, cattle prices and receipts at Toronto are highly correlated. Since live prices on the other markets are highly correlated with Toronto's cattle prices, live receipts on the Toronto market increase in importance as a useful tool in forecasting live prices in the cattle industry.