Concerns about potential impacts of captive supply on fed cattle prices have been present for several years in
both Canada and the US. In Canada, the magnitude of concern escalated during closure of the US border to fed
cattle trade (May 2003 to July 2005) and has remained at an elevated level. Many producers in both Canada and
the US argue that presence of captive supplies results in lower cash fed cattle prices. These concerns have
motivated policy proposals targeted toward controlling how fed cattle can be marketed and who can own and
feed cattle. However, captive supply arrangements evolved out of economic incentives of cattle producers and
beef packers to engage in new business arrangements. Therefore, policies that may curtail such practices are
met with considerable opposition by those who enjoy direct benefits from these arrangements. This study was
designed to assist Alberta Beef Producers in their assessment of captive supplies and possible action paths. We
summarize what we know about the impacts of captive supply on fed cattle markets and identify market
information and research needs related to fed cattle markets and captive supply in Canada.
