Factors affecting western Kansas fed cattle
prices during May through November 1990
were investigated. In particular, the impact of
changes in captive cattle supplies on cash
prices was examined. The term captive cattle
supplies refers to cattle procured by a packer
well in advance of slaughter. Captive supplies
take one of three forms: 1) packer-owned
cattle, 2) cattle procured on forward contracts,
and 3) cattle procured under formula price (or
marketing) agreements. Captive supplies were
defined as cattle procured under forward
contracts or formula price agreements, because
data on packer-owned cattle were unavailable.
Over the May through November
1990 period as a whole, the presence of captive
cattle supplies was associated with an
average reduction in western Kansas cash
market transaction prices of about $0.15/cwt.
