Contemporaneous and lagged causal relationships among negotiated live cattle cash markets

Abstract

U.S. live cattle markets have experienced dramatic shifts in marketing methods over the past two decades, changing the way live cattle prices are discovered. We identify relationships between prices of the five major live cattle marketing regions using Granger causality and directed graph analysis. The two approaches complement each other and reveal that interweek and intraweek price discovery roles for given markets differ. Evidence indicates that Colorado, though a minor market in terms of relative volume, has become an important source of interweek price information to other markets.