Scott W. Fausti, Hernan A. Tejeda, Matthew A. Diersen
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引用次数: 0
Abstract
An overview of how macroeconomic shocks affect beef quality-grade premiums and discounts in the U.S. fed cattle market is discussed. We review the shock transmission linkages along the beef industry supply chain and determine the economic implications for the finished cattle market. The analysis provides insight into how the fed cattle market responds to macroeconomic shocks. The economic implications of financial risk associated with the behavior of beef carcass quality-grade premiums and discounts associated with the Great Recession and the COVID pandemic are contrasted and assessed.
Data analysis indicates that macroeconomic shocks affect the quality-grade premium pricing mechanism for finished cattle. The origins of the shock (aggregate demand versus aggregate supply) and government fiscal policy intervention determines how premium levels and premium volatility responds to a macroeconomic shock. Thus, beef carcass quality-grade premiums are not only subject to industry idiosyncratic risk, such as swings in the seasonal demand for beef, but are also subject to systematic risk associated with business cycle fluctuations.
期刊介绍：
Agricultural Economics aims to disseminate the most important research results and policy analyses in our discipline, from all regions of the world. Topical coverage ranges from consumption and nutrition to land use and the environment, at every scale of analysis from households to markets and the macro-economy. Applicable methodologies include econometric estimation and statistical hypothesis testing, optimization and simulation models, descriptive reviews and policy analyses. We particularly encourage submission of empirical work that can be replicated and tested by others.
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